Performance and

Accountability Report

Fiscal Year 2006

Federal Law Enforcement Training Center
ii Federal Law Enforcement Training Center 

Office of Artesia Operations | This office administers the 

delivery of law enforcement training programs in Artesia, New 

Mexico, hosts the U.S. Border Patrol Academy, and manages all 

logistical and support activities for Artesia, including various 

contractual services for lodging, food, base maintenance and 

other support services.
 2006 Performance Accountability Report iii

fletc

Message from 

the Director

Federal Law Enforcement Training Center

U.S. Department of Homeland Security

1131 Chapel Crossing Road

Glynco, Georgia 31524

I am pleased to present the Federal Law Enforcement Training Center’s 

(FLETC) Performance and Accountability Report (PAR) for Fiscal Year (FY) 

2006. This report contains the financial and program performance results 

of our operations in providing superior and cost-effective training to 

approximately 53,000 law enforcement students in FY 2006.

The FLETC’s mission is to train those who protect our homeland. While 

the mission statement is simple, the efforts to accomplish the mission 

are enormous. As reflected in this report, the FLETC achieved numerous 

accomplishments in FY 2006 to further elevate its training operations. 

Some notable highlights are: received academy accreditation and program 

accreditation of the FLETC Law Enforcement Instructor Training Program; 

increased training efforts for Immigration and Customs Enforcement (ICE) 

Investigators and Deportation Officers in connection with the Secure Border 

Initiative (SBI); the opening of a new state-of-the-art combined skills training facility to provide comprehensive 

driver training; implementation of simulation technology to ensure students receive actual hands-on experience 

and test their critical decision-making skills without the inherent risks involved in the learned tasks; continued 

progress on the Practical Applications/Counterterrorism Operations Training Facility to provide a realistic training 

environment in combating terrorism; initiatives to integrate intelligence training into all basic law enforcement 

programs to promote intelligence analysis and information sharing; and creation of a new Inland Boat Training 

Program (IBOT) to teach basic skills enabling officers to safely operate a boat in a law enforcement capacity.

This PAR was prepared in accordance with the Office of Management and Budget (OMB) guidance. The FLETC 

management represents that the financial and performance data contained is reliable and complete. An assessment 

of the FLETC’s internal accounting and administrative controls and financial management systems were performed 

in compliance with the Federal Managers’ Financial Integrity Act of 1982 (FMFIA) and the Federal Financial 

Management Improvement Act of 1996 (FFMIA). Management’s assurances are presented in the Analysis of 

Systems, Controls and Legal Compliance section of the Management’s Discussion and Analysis. Additionally, the 

FLETC underwent an independent audit of its Balance Sheet by KPMG LLP during FY 2006. The independent 

auditor’s report and related information is contained in the financial section of this PAR. 

Law enforcement continues to meet many demanding challenges. The FLETC’s talented and dedicated staff is 

committed to the vision of providing fast, flexible and focused training to equip our students with the skills 

and knowledge needed to protect our homeland. I believe the FLETC vision captures the qualities essential in 

confronting the ever-changing challenges, and makes us the premier law enforcement training center. 
iv Federal Law Enforcement Training Center 

We train those who protect our homeland

wet, wild ride! High speed pursuit and tactics 

are part of Inland Boat Operators Training Program 

at FLETC Gynco Operations.
 2006 Performance Accountability Report 

fletc

The Contents

Executive Summary 1

Part I – Management’s Discussion and Analysis 3

Introduction 4

History 4

Organization 5

Workload Statistics 14

FY 2006 Highlights 16

Analysis of Financial Statements 21

Analysis of Systems, Controls and Legal Compliance 26

Improper Payments Information Act (IPIA) Reporting 32

Future Effects on Existing, Currently Known Demands, Risks, 

Uncertainties, Events, Conditions and Trends 32

Limitations of the Financial Statements 34

 

Part II – Strategic Plan and Performance 37 

FLETC Strategic Plan 38

Performance Goals & Results 39

FLETC Strategic and Performance Plan Linkage 44

Major Activities and Priorities 45

Part III – Financial Information 47

Message from the Chief Financial Officer 48

Independent Auditors’ Report 51

Consolidated Balance Sheet 80

Notes to the Consolidated Balance Sheet 81

Required Supplementary Information 93

Part IV - Other Supplementary Information 95

FLETC Partner Organizations 96

Principal Officials of the FLETC 98
vi Federal Law Enforcement Training Center 

Presidential Visit to FLETC ARTESIA OPERATIONS. 

Department of Homeland Security Secretary Michael C. 

Chertoff and President George W. Bush speak to the 

FLETC staff and students at the commissioning ceremony 

of W. Ralph Basham as Comissioner, U.S. Customs and 

Border Protection. 

We train those who protect our homeland
 2006 Performance Accountability Report 

fletc

This report marks the 11th consecutive year that the Federal Law Enforcement 

Training Center (FLETC) has prepared a Performance and Accountability Report 

(PAR).

The report complies with the PAR format established by OMB Circular A-136 and 

includes a message from the FLETC’s Director, Management’s Discussion and 

Analysis Section in Part I, Strategic Plan and Performance Section in Part II, 

and Financial Information Section in Part III. The FLETC Chief Financial Officer’s 

letter, Independent Auditors’ Report, and the Consolidated Balance Sheet, Notes 

to the Consolidated Balance Sheet and Required Supplementary Information 

are in Part III. Part IV contains Other Supplementary Information relevant to the 

FLETC training operations.

A copy of the FLETC’s FY 2006 PAR is available for public review and downloading 

at the FLETC’s Web Page: http://www.fletc.gov/contents/.

Executive Summary
 Federal Law Enforcement Training Center

Presidential Visit to FLETC ARTESIA OPERATIONS. 

New Mexico Senator Pete V. Domenici introduces 

the president to the FLETC staff and students at the 

commissioning ceremony of W. Ralph Basham as 

Comissioner, U.S. Customs and Border Protection. 
Performance & Accountability Report

Fiscal Year 2006

The Federal Law Enforcement Training Center

glynco | Artesia | charleston | cheltenham | ilea botswana | ILEA san salvador

Part I Management’s Discussion and Analysis
 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Introduction

The Federal Law Enforcement Training Center 

(FLETC) is an agency within the U.S. Department 

of Homeland Security (DHS). The FLETC is the 

leader in career-long law enforcement training, 

preparing law enforcement professionals to fulfill 

their responsibilities safely and proficiently, and 

ensuring that training is accomplished in the most 

cost-effective manner. The FLETC is an interagency 

organization that provides law enforcement 

training to the majority of Federal law enforcement 

personnel, while also training state, local, private 

sector security, and international law enforcement 

personnel. The number of agencies attending 

training and the number of students trained have 

steadily increased over the FLETC’s 36-year history.

To accomplish our mission, the following strategic 

goals guide our priorities and actions:

• Provide training that develops the skills and

knowledge to perform law enforcement 

 functions safely, effectively, and professionally.

• Significantly expand access to and availability

of quality law enforcement training.

• Create a new organizational culture through

 law enforcement training based on tradition

 and history.

• Implement best management practices.

History

Prior to the establishment of the FLETC in 1970, 

the quality of training received by Federal law 

enforcement personnel varied greatly among 

Federal agencies. Standardized training was an 

unexplored concept, and inadequate facilities 

and redundancy were prevalent as each agency 

independently trained its own personnel. Studies 

conducted in the late 1960s revealed an urgent 

need for high-quality, cost-effective training by 

a cadre of professional instructors using modern 

training facilities and standardized course content. 

The U.S. Congress responded by authorizing funds 

for planning and constructing the Consolidated 

Federal Law Enforcement Training Center (CFLETC), 

later named the FLETC. 

After beginning operations in Washington, DC, 

the FLETC headquarters was relocated to Glynco, 

Georgia in 1975. Located on the southeast Georgia 

coast, the Glynco training center has classroom 

buildings, dining and residence halls, and stateof-the-art facilities for firearms, physical, driver, 

marine, and computer-based training activities. 

A similar, but smaller training center is located 

in Artesia, New Mexico. The Artesia site, which 

opened in late 1989, accommodates training 

principally for the Bureau of Indian Affairs and 

other law enforcement personnel located in the 

western United States. It now also hosts the U.S. 

Border Patrol Academy consolidated from various 

U.S. Border Patrol training sites, including a former 

training center in Charleston, South Carolina that 

had been established in FY 1991. In May 2001, 

the former Naval Communications Detachment 

facility in Cheltenham, Maryland, was transferred 

to the FLETC for conversion into a firearms and 

vehicle training facility that is used principally 

for in-service and re-qualification for Federal law 

enforcement officers and agents in the metropolitan 

Washington, DC area. In February 2003, Public 

Law 108-7 established Charleston, South Carolina 

as a permanent training facility within DHS to be 

operated under the direction of the FLETC.

Originally, only a handful of agencies trained 

at the FLETC. Today, the FLETC serves as an 

interagency law enforcement training organization 

for 82 Federal agencies. A majority of the partner 

organizations have transferred portions or all of 

their law enforcement training operations to one 

of the FLETC’s training sites. These training offices 
 2006 Performance Accountability Report 

fletc

and academies coordinate the training activities of 

their personnel and conduct advanced and agencyspecific training programs. Additionally, other 

Federal, state and local organizations, along with 

international law enforcement personnel, train at 

the FLETC on a space-available basis. The growth 

in the number of agencies that train at the FLETC 

clearly substantiates the success and resiliency of the 

consolidated training concept, as well as the quality 

and cost effectiveness of the training provided to 

the clientele.

Organization

The FLETC, whose senior manager is the Director, 

is organized into six directorates. The Deputy 

Director is responsible for five directorates each 

managed by an Assistant Director, while the Senior 

Associate Director for the Washington Operations 

is responsible for the Chief Financial Officer (CFO) 

directorate. The following describes the elements in 

the Table of Organization:

Office of the Director: The Office of the Director

administers the activities of the FLETC and is 

responsible for accomplishing its mission. The 

Director provides overall direction for the operation 

of the FLETC’s programs with the objective of 

ensuring effective, efficient and economical 

administration. The Director develops, manages 

and directs the FLETC’s programs. Staff attached to 

this office include the Office of the Deputy Director, 

Senior Associate Director for the Washington 

Operations, Chief of Staff, Equal Employment 

Opportunity, Office of Chief Counsel, Public Affairs, 

and the Inspection and Compliance Division. 

The staffs assist the Director in accomplishing the 

mission of the FLETC by providing coordination, 

public affairs, legal counsel, and other activities. 
 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Senior Associate Director for Washington 

Operations: Serving as the Director’s surrogate 

in Washington, DC, the Senior Associate Director 

provides legislative support and DHS and OMB 

coordination. The following offices report to 

the Senior Associate Director for Washington 

Operations.

• Office of International Training and Technical

Assistance: This office provides oversight for

 the administration and delivery of international

law enforcement training programs. The office

plans, develops, and presents training courses 

 and practical exercise applications related to 

 international law enforcement training.

- International Law Enforcement Academy

 (ILEA) Gaborone, Botswana, Africa: This 

 division provides management direction for

the Botswana ILEA.

- International Law Enforcement Academy

(ILEA) Latin America: This division 

 provides management direction for the Latin 

 America ILEA. 

• Chief Financial Officer (CFO) Directorate:

 This directorate plans and directs the activities 

related to the FLETC’s budget, financial 

systems and strategic plans. This office 

 administers the integration of planning and 

 performance measurement activities with 

budget formulation and execution. This office 

ensures the integrity of financial records and 

performs periodic reporting of financial 

 activities. The CFO Directorate consists of three

 subordinate divisions:

- Budget Division: This division prepares

the FLETC budget submission for DHS, OMB,

and Congressional levels, executes the fiscal 

 year appropriations for the bureau, and 

 develops cost data for training programs.

 - Finance Division: This division directs 

the financial management system including 

all accounting and reporting of financial

activities, administers the core financial 

 management software, and provides 

 accounting services involving accounts

 payable, accounts receivable, payroll, 

 and travel.

- Strategic Planning and Analysis Division:

 This division develops the FLETC Strategic 

 Plan and researches, develops, recommends

 and documents policies and procedures, 

 conducts management analysis, and reports

 performance goals and measurements. 

Office of the Deputy Director: The Deputy Director 

assists the Director and acts, in her behalf during 

her absence, in administering the activities of 

the FLETC. The Deputy Director provides overall 

direction to the five subordinate directorates 

for the operation of the FLETC’s programs. In 

addition, other staff attached to this office include 

the Security and Emergency Division, the Special 

Investigations Division, and the Federal Law 

Enforcement Training Accreditation’s Office of 

Accreditation. 

• Training Directorate: Consisting of two

major subordinate offices, the Offices of 

 Training Applications and Training Operations,

 this directorate administers all law enforcement 

training activities at the FLETC headquarters.

 

		 Office of Training Applications: This office

 directs faculty and staff and manages 

 programs in support of basic, advanced and 

 specialized law enforcement training. There 

are five faculty elements within the Office of 

 Training Applications.
 2006 Performance Accountability Report 

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 - Behavioral Science Division: This division

 plans, develops, and presents formal training 

 courses and practical exercise applications 

 related to the area of interpersonal relations 

 including interviewing, handling crisis 

 situations, professional ethics, conduct, sexual

 harassment, cultural sensitivity, and oral and 

 written communications.

- Physical Techniques Division: This division

 plans, develops, and presents formal training 

 courses and practical exercise applications

 related to trauma management and

 cardiopulmonary resuscitation, self defense, 

arrest techniques, physical fitness, safety and 

 water survival. This division is also

responsible for special use equipment and 

acilities assigned to the specific training area.

- Legal Division: This division plans, develops, 

 and presents formal training courses and 

 practical exercise applications related to the

 U.S. Constitution, applicable case law, 

 statutory provisions, criminal law and

 evidence procedures.

- Firearms Division: This division plans, 

 develops, and presents formal training courses

 and practical exercise applications related

 to the specialized and technical nature of law 

 enforcement armament and weaponry. This

 division is also responsible for the special use

equipment and facilities assigned, including

 the armory, which provides FLETC-wide

 armament and weaponry security, repair, and

 maintenance services.

- Law Enforcement Leadership Institute:

 This division plans, develops, and presents

 formal training courses and practical exercise 

 applications related to managing and

 supervising law enforcement operations.

 Office of Training Operations: This office

 directs faculty and staff, manages programs in 

 support of basic, advanced and specialized law

 enforcement training, and administers the

FLETC accreditation program. There are five

faculty elements within the Office of 

 Training Operations. 

- Enforcement Operations Division: This

 division plans, develops, and presents

 formal training courses and practical exercise

 applications related to various law

 enforcement operational procedures ranging

 from undercover and surveillance activities

 to the execution of search warrants. This 

 division also provides the overall coordination

 for practical exercises.

- Forensics and Investigative Technologies

Division: This division plans, develops, and 

 presents formal training courses and practical

 exercise applications related to various 

criminalistic skills and knowledge, including

 laboratory and crime scene activities.

- Computer and Financial Investigations

Division: This division plans, develops, and 

 presents formal training courses and practical

 exercise applications related to the 

 investigation of white collar crime violations,

 computer fraud, and microcomputer 

 applications in law enforcement. This division

 is also responsible for the special use 

equipment and facilities assigned to this 

specific training area.
 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

- Driver and Marine Division: This division

 plans, develops, and presents formal training

 courses and practical exercise applications

 related to the specialized nature and use of 

 vehicles and vessels, including search 

techniques and operational procedures in 

 a law enforcement environment. This 

 division is also responsible for the special 

use equipment and facilities assigned to 

these specific training areas.

- Counterterrorism Division: This division

 plans, develops, and presents formal training

 courses and practical exercise applications 

 related to anti-terrorism, counter-terrorism, 

 and physical security.

• Training Innovation and Management 

Directorate: Consisting of two major 

subordinate offices, the Office of Training 

Management and the Office of Training 

 Support, this directorate provides consistent 

 allocation, management and coordination 

 of training programs, promotes the innovative

 enterprise-wide development and application

 of training technology, and facilitates the 

 integration of training activities with 

 emerging technologies. 

			Office of Training Management: This office

 provides oversight to three divisions.

- Evaluation and Analysis Division: This

 division provides institutional research,

 consultation services, student evaluation and

 testing, and program validation studies.

- Training Management Division: This 

 division provides administrative assistance, 

 including the coordination of advanced

 training activities; serving as the repository

 for lesson plans, syllabi, class reports, and

 student performance records; developing 

 optimal scheduling plans to meet training 

requirements; and developing both long and 

 short range plans for training operations.

- Training Resource Coordination Division: 

 This division provides training logistical 

 support, including the scheduling of 

 training programs, activities, and facilities.

	 Office of Training Support: This office provides

 services and materials that most directly relate 

 to the training mission. It consists of the

 following three divisions:

- Training Innovation Division: This 

division identifies, researches, and evaluates 

 emerging technology for application in law 

 enforcement training.

- Media Support Division: This division

 provides a full range of media and graphic 

 arts services for all basic and advanced 

 training activities including visual/media

 production, learning resource services, and

 printing/reproduction.

- Student Services Division: This division

 provides physical therapy, student

 recreation, and contractual support for

 health services, lodging, meals, student 

 records maintenance, and other contractual

 services.

• Field Training Directorate: This directorate

provides oversight of Federal and non-Federal 

field training functions, including state, 

 local and international law enforcement training

 activities, as well as management of the FLETC’s

field training sites in New Mexico, Maryland, 
 2006 Performance Accountability Report 

fletc

 and South Carolina, and International Law

Enforcement Academies in Botswana and 

 Latin America.

		 Office of Artesia Operations: This office

 administers the delivery of law enforcement

training programs in Artesia, New Mexico, 

hosts the U.S. Border Patrol Academy, and

 manages all logistical and support activities

 for Artesia, including various contractual 

 services for lodging, food, base maintenance

 and other support services.

		 Office of Cheltenham Operations: This

office administers the delivery of law 

 enforcement training programs in

Cheltenham, Maryland and manages all 

 logistical and support activities for its 

 operation.

		 Office of Charleston Operations: This 

office administers the delivery of law 

 enforcement training programs in Charleston, 

 South Carolina.

		 Office of State and Local Law Enforcement 

Training: This office presents specialized 

program offerings that enhance networking

 and cooperation between Federal, state, and 

 local law enforcement agencies. These 

 programs vary in length from three days 

to four weeks and have an average class size 

 of 25 students. Additionally, technical 

 assistance is provided to state and local law 

 enforcement agencies’ training initiatives. 

• Administration Directorate: This directorate

 plans, directs and coordinates the FLETC’s 

administrative programs and objectives. It 

 formulates policies and courses of action for 

programs, which include staffing requirements, 

 administrative services, human resources, 
10 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

 procurement, property management, facilities

 management, and environmental and safety

 program management. The directorate directly 

 supervises the Human Resources Division and 

 also administers the Critical Incident and Stress 

Management program. In addition to the 

Human Capital Planning Program Officer, the 

two major offices within the directorate 

consist of the Assets Management and Facilities 

Management. 

 

- Human Resources Division: This division

 develops and administers the human 

 resources policies and programs at the 

FLETC and also conducts workforce and

organizational assessments, workforce 

 structuring and planning, studies and 

analysis, external marketing and diversity 

 programs, and employee development 

 programs. 

		 Office of Assets Management: This office

 provides managerial oversight to two 

divisions for the acquisition, management, 

 and disposal of assets.

- Procurement Division: This division 

 develops and administers the procurement

 and contracting program at the FLETC.

- Property Management Division: This 

 division plans and directs the overall

 property management program including 

 real property and non-expendable 

 personal property at the FLETC.

		 Office of Operations Support: The office is

 responsible for the monitoring of impact 

costs and risk exposures, as well as regulatory

 compliance, associated with the reliability, 

 availability, maintainability, performance, and 
 2006 Performance Accountability Report 11

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 longevity of physical assets. 

 - Facilities Management Division: This

 division develops and administers the 

 facilities management program, including

 maintenance, alterations, emergency 

 service, repairs and preventive maintenance

for all buildings, grounds and equipment. 

 It also coordinates all in-house, GSA or 

 contract construction/alteration operations, 

 and provides professional engineering 

 services and assistance.

 - Environmental and Safety Division: This 

 division administers the environmental 

 and safety program for the agency 

 and ensures compliance with the applicable 

 environmental and safety laws and 

 regulations.

• Chief Information Officer Directorate: This 

 directorate manages two divisions in support 

 of the FLETC’s initiative for expanding 

 electronic government, overall information 

 technology (IT) planning function, 

 coordination of IT expenditures and activities, 

and compatibility of IT equipment and service

acquisitions.

 - Operations Support Division: This 

 division supports FLETC IT infrastructure 

 operations and maintenance.

- Information Technology Solutions

Management Division: This division

supports project planning, acquisition, and

 implementation activities. It also 

 coordinates the implementation of leading 

 edge technologies to support law 

 enforcement training.
12 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Security and 

Emergency 

Management 

Division

Assistant Director

Chief Information 

Officer

IT Operstions & 

Support Division

IT Solutions 

Management 

Division

Deputy Assistant

Director

Facilities 

Management

Assistant Director

Administration

Facilities

Management

Division

Environmental

and

Safety

Division

Human Capital Planning

Program Officer

Deputy Assistant

Director

Assets Management

Procurement

Division

Property

Management

Division

Human Resources

Division

Deputy Assistant

Director

CIO

U. S. Department of Homeland Security

Federal Law Enforcement Training Center

Organizational Chart

July 3, 2006

Critical 

Incident Stress 

Management
 2006 Performance Accountability Report 13

fletc

Director

Senior Associate Director

Washington Operations

Assistant Director

Chief Financial Officer

Deputy Director

Chief of Staff

Public Affairs

Inspection & 

Compliance Div

Chief Counsel

EEO

Division

Special 

Investigations 

Division

Budget Division

Finance Division

Strategic Planning & 

Analysis Division

Assistant Director

Field Training

Deputy Assistant

Director

Artesia, NM

Deputy Assistant

Director

Cheltenham, MD

Deputy Assistant

Director

Charleston, SC

International Training 

& Technical Assistance

Deputy Assistant

Director

Office of

State and Local

Training

Deputy Assistant

Director - Training

Management

Deputy Assistant

Director 

Training Support

Training 

Innovation 

Division

Training 

Management

Division

Media Support 

Division

Student Services 

Division

FLETA

Office of

Accreditation

Assistant Director

Training Innovation

and Management

Deputy Assistant

Director

Training Applications

Deputy Assistant

Director 

Training Operations

Behavioral 

Science Division

Physical 

Techniques 

Division

Enforcement 

Operations 

Division

Forensics and 

Investigative 

Technologies Div

Assistant Director

Training

Legal

Division

Firearms

Division

Computer and

Financial 

Investigations Div

Driver and 

Marine Division

Law Enforcement 

Leadership 

Institute

Counter 

Terrorism 

Division

Training 

Resource 

Coordination 

Division

Evaluation & 

Analysis Div.

ILEA Gaborone

ILEA San Salvador
14 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Workload Statistics

Number of Students Trained FY 2002 – FY 2006 

Number of Student-Weeks of Training FY 2002 - FY 2006

FY 2002 FY 2003

FY 2004

FY 2005

FY 2006

Others

Advanced

Basic

144 155

111

84 104

13 22 31

29 4 31

4

4 4

4

0

30

60

90

120

150

180

THOUSAND

NUMBER OF STUDENT-WEEKS

The number of students trained has grown consistently over the past five years. The number of students 

has increased by 9% from FY 2005 and by 59% since FY 2002. The number of student-weeks of training 

has fluctuated as a result of heavy post-9/11 training requirements in FY 2002 and FY 2003.

20

9

3

18

16

4

13

28

4

10

32

5

12

35

4

0

10

20

30

40

50

60

THOUSAND

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

NUMBER OF STUDENTS TRAINED

Basic Advanced Others
 2006 Performance Accountability Report 15

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Training Conducted by Site and Category - FY 2006

The FLETC provided 139,192 student-weeks of training to 51,249 law enforcement agents and 

officers in FY 2006. Of the total student-weeks, 75% and 23% were attributed to the basic and 

advanced training programs, respectively.

PERCENT

OF TOTAL

CATEGORY STUDENTS STUDENT-WEEKS ARSP * STUDENT-WEEKS

GLYNCO

Basic 9,449 72,234 1,389 51.9%

Advanced 11,665 15,634 301 11.2%

State & Local 543 907 17 0.7%

Subtotal 21,657 88,775 1,707 63.8%

ARTESIA

Basic 1,514 29,922 575 21.5%

Advanced 3,264 4,314 83 3.1%

State & Local 21 - 16 0.0%

Subtotal 4,799 34,252 658 24.6%

CHARLESTON

Basic 191 946 18 0.7%

Advanced 2,380 6,521 125 4.7%

State & Local 84 64 1 0.0%

Subtotal 2,655 7,531 144 5.4%

CHELTENHAM

Basic 347 1,063 20 0.8%

Advanced 16,847 4,002 77 2.9%

State & Local 305 121 2 0.1%

Subtotal 17,499 5,186 99 3.7%

EXPORT

Advanced 1,144 1,043 20 0.7%

State & Local 2,963 2,037 39 1.5%

International 532 368 7 0.3%

Subtotal 4,639 3,448 66 2.5%

RECAP

Basic 11,501 104,165 2,002 74.8%

Advanced 35,300 31,514 606 22.6%

State & Local 3,916 3,145 59 2.3%

International 532 368 7 0.3%

Total 51,249 139,192 2,674 100.0%

* Average Resident Student Population
16 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

FY 2006 HIGHLIGHTS

The following notable FY 2006 accomplishments 

demonstrate our commitment to fulfill our 

mission and to support the needs of our Partner 

Organizations. 

• Cooperative Research and Development

Agreements. The FLETC obtained authority to 

enter into Cooperative Research and Development 

Agreements (CRADA), Cooperative Agreements 

(CA), and the authority to administer grants. 

Borne of the need to expand the capability to 

research new computer and network forensics 

technologies and introduce the latest investigative 

tools into the classroom, the FLETC will capitalize 

on this authority with the first ever FLETC CRADA 

with Armstrong Atlantic State University, a noted 

computer science leader in the southeastern U.S. 

This groundbreaking work will be implemented 

across the FLETC with the adoption of CRADA 

business rules that will fuel other areas of 

research and innovation.

• Federal Law Enforcement Legal Advisors

Conference. The FLETC, with the cooperation 

of the Federal Bureau of Investigations and Drug 

Enforcement Agency Academies, developed and 

conducted the first three day conference for 

federal agency attorneys who provide tactical/

operational legal advice to special agents and 

uniformed officers. Over 150 attorneys from 35 

agencies involved in the protection of national 

security met to share knowledge, to address 

legal issues of common interest, and to better 

understand how to work together and network to 

encourage enhanced communication and sharing 

of information on matters of mutual interest 

in the future. Conference speakers included 

nationally recognized experts on law enforcement 

and intelligence issues.

• Investigating Stored Value Cards. In response

to a growing law enforcement concern with the 

regulation, abuse and investigation of alternative 

money transfer systems, the FLETC formed 

an interagency working group composed of 

virtually every law enforcement, regulatory 

and intelligence agency concerned with the 

illicit transfer of funds via “stored value cards.” 

Upon its foundation and because of the critical 

importance of sharing investigative lessons 

learned to be rapidly integrated into training, 

the FLETC was asked by participants to chair this 

group and lead its efforts. Important first steps 

were taken to involve stored value card industry 

representatives in the discussion to fully explain 

the instrument and their own systems of internal 

controls and to assist the investigative community 

to identify when the instruments were being 

used for illicit purposes. Alternative money 

systems continue to be of prime concern and 

investigations of illicit schemes to fund criminal 

and terrorist operations.

• Combined Skills Facility (CSF). 

The construction of the 1.83 mile CSF was 

completed in FY 2006. The CSF replicates urban 

and rural roadway infrastructures with varying 

configuration and signage, including surface 

wetting capabilities. Additionally, it contains a 

high center of gravity (4X4) course, and a fourlane special tactics course. 

• Law Enforcement Intelligence Training. 

The FLETC moved decisively in FY 2006 to 

support the National Criminal Intelligence 

Sharing Plan and the DHS initiatives to close 

information sharing gaps between agencies. 

FLETC designed a three phase program to 

introduce new law enforcement officers to 

intelligence concepts and terrorism pre-incident 
 2006 Performance Accountability Report 17

fletc

indicators, conduct basic law enforcement 

intelligence analytic training and provide 

a comprehensive set of law enforcement 

intelligence skills for state and local officers. 

Curriculum developed for the basic officers 

and investigators will be reinforced by practical 

exercises requiring the identification and 

reporting of suspect incidents to a fusion cell or 

joint terrorism task force. The FLETC’s existing 

Intelligence Analyst Training Program was 

exported twice to the National Capitol Region 

as a proof of concept and to further develop a 

partnership with the DHS Office of Intelligence 

and Analysis to reach an underserved population 

of analysts bridging the gap between traditional 

national security intelligence and the growing 

discipline of law enforcement intelligence. 

Simultaneously, and in partnership with DHS 

Office of Grants and Training, the FLETC designed 

and fielded an analytic training program 

focused on the needs of state and local agencies, 

particularly those responsible for supporting state 

or major metropolitan area intelligence fusion 

cells. 

• Tactics for Flying Armed Training.

 Approximately 600 agents from Partner 

Organizations were trained in topics including: 

use of force, close quarter defensive tactics, 

Federal Aviation Administration crew common 

strategy, Federal Flight Deck Officer procedures, 

tactics for linear environments, improvised 

explosive devices, and tactics for mitigating 

hijackings. The training was delivered though 

a variety of methods including a residential 

Center Advanced training, agency in-service, 

and export training programs. Also, in addition 

to the advanced training, approximately 500 

basic students were trained at the FLETC in the 

Criminal Investigator Training Program, the 

Uniform Police Training Program, and the Land 

Management Police Training Program. These 

students were trained in a new facility that houses 

six aircraft simulators, which were designed and 

constructed to mimic various types of aircraft.

• International Financial Investigations Training. 

 The FLETC significantly expanded its financial 

investigations training opportunities in support of 
18 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

both regional and global security concerns and in 

furtherance of partnerships between DHS, FLETC, 

the Departments of State, Treasury and Justice. 

In conjunction with the IRS National Criminal 

Investigations Academy, the FLETC established a 

two-year, comprehensive money laundering and 

asset forfeiture training program in support of 

Plan Colombia, an interagency mutual assistance 

program aimed at thwarting drug traffickers 

in the southern hemisphere. The FLETC also 

expanded financial investigations training 

available to southern Africa by bringing first ever 

iterations of its Financial Forensics Techniques 

Training Program (FFTTP) and the International 

Banking and Money Laundering Training 

Program to the International Law Enforcement 

Academy (ILEA), Gaborone, Botswana. 

Additional international training success was 

also experienced with the first ever export of the 

FFTTP to Malaysia in support of the Malaysian 

Inland Revenue Board. The FLETC has adeptly 

distinguished itself in reaching an international 

audience by researching and building curriculum 

based on host nation laws and regional concerns 

rather than focusing on exporting U.S. or agency 

specific investigative techniques.

• Commercial Vehicle Counterterrorism

Instructor Training Program (CVCITP). 

In response to potential threats to the 

transportation infrastructure, the FLETC piloted 

and implemented the CVCITP. This program is 

designed to meet the needs of law enforcement 

officers responsible for the enforcement of 

commercial vehicles traveling on the Nation’s 

highways. 

• Critical Incident Response Training Program

(CIRTP). The FLETC partnered with the State 

of South Carolina and delivered eight CIRTPs. 

It is a train-the-trainer program designed to 

deal with the full range of options available to 

a law enforcement agency when responding to 

a critical incident. This program is based upon 

the hostage-barricade model since experience 

has proven that the first 30 minutes of a hostagebarricade incident are normally the most difficult 

and dangerous. Occurrences in the early stages 

may actually limit and have an overwhelming 

influence on the resolution options. 

• Accreditation of the Law Enforcement

Instructor Training Program. On July 20, 

2006 the Federal Law Enforcement Training 

Accreditation (FLETA) Board of Directors 

awarded program accreditation to the FLETC Law 

Enforcement Instructor Training Program (LEITP). 

The LEITP is the first FLETC program awarded 

accreditation status and follows the FLETA’s 

March 2006 decision to award FLETC academy 

accreditation. The LEITP is designed to meet the 

needs of full-time law enforcement instructors, 

particularly permanent FLETC instructors and 

long-term temporary instructors detailed to the 

FLETC from the Partner Organizations The LEITP 

is based largely on student-centered learning and 

focuses on presentation skills and basic lesson 

plan development. Because FLETC instructors play 

a critical role in providing basic and advanced 

law enforcement training to agents and officers 

from 82 Federal Partner Organizations and to the 

state, local, and international law enforcement 

community, the LEITP is critical to the success 

of law enforcement training, DHS, and the law 

enforcement profession at large. 

• Student Administration and Scheduling

System (SASS). In May 2006 the FLETC 

awarded a multi-year modular contract to Science 

Applications International Corporation (SAIC) for 
 2006 Performance Accountability Report 19

fletc

the development and implementation of the SASS. 

The SASS will integrate the FLETC’s numerous 

manual and partially automated processes. 

The SASS will also enable the FLETC to apply 

standardized scheduling priorities enterprisewide and to thoroughly analyze all aspects of 

program and facility scheduling as well as student 

administration functions. This tool will provide 

information necessary to efficiently utilize current 

resources, plan for future requirements, and more 

effectively respond to the training needs of the 

FLETC’s 82 Partner Organizations. 

• Simulation Systems. The Training Innovation

Division laid the groundwork for the strategic 

implementation of simulations and similar 

technology into a variety of FLETC law 

enforcement training programs. The first pod of 

four driver training simulators was delivered to 

the driver training complex for use in scenario 

development and staff training. The Training 

Innovation Division, in coordination with 

driver training experts from the Driver and 

Marine Division, initiated the implementation 

strategy of incorporating capabilities into 

the driving simulators that augment training 

conducted on the new Combined Skills Range. 

The simulated scenario-based training allows 

trainers to test critical decision-making skills 

without the inherent risks involved in students 

performing such tasks as driving in heavy traffic, 

traveling through intersections, and pursuing 

vehicles in urban areas. Delivery of additional 

driving simulators is planned for the end of the 

calendar year to coincide with the completion 

of the FLETC’s new Simulation Lab facility. The 

Simulation Lab will house a variety of simulation 

systems under development and will provide 

space for testing and prototyping of simulation 

packages and systems being considered for 

implementation in FLETC training programs. 

Tabletop simulations for Weapons of Mass 

Destruction and HAZMAT training, as well as 

applications for the Protective Service Operations 

Training Program are now under development. 

• ILEA San Salvador. In FY 2006, the ILEA San

Salvador will have graduated ten one-two week 

specialized training programs and two 6-week 

core programs for a total of 480 students. The 

Law Enforcement Management Development 

Program held its second graduation ceremony for 

40 mid-level law enforcement officials from El 

Salvador, Costa Rica, Ecuador, and Panama. Also, 

the renovations of the ILEA San Salvador Academy 

were completed on June 20, 2006.

• Secretary Condoleezza Rice announced to the

General Assembly of the Organization of 

American States (OSA) that the United States 

would work with the government of Peru to 

extend the ILEA training into South America 

and negotiations are underway to consider the 

establishment of an ILEA Regional Training 

Center in Lima. For the period of October 1, 

2005 through September 30, 2006, 320 students 

graduated from specialized training programs 

conducted at that venue.

• Archeological Resource Protection Training

Program (ARPTP). The Forensics and 

Investigative Technologies Division exported the 

ARPTP to the Grand Canyon National Park and 

trained 32 students from several Federal agencies. 

The ARPTP provides advance training to both 

law enforcement officers and archeologists in 

the investigation and successful prosecution of 

archeological resource crimes and is conducted 

several times a year at various locations across the 

U.S. 
20 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

• Inland Boat Operators Training (IBOT)

Program. The FLETC successfully conducted 

its first IBOT program at Glynco, GA. The IBOT 

program was designed to teach basic skills 

to those officers with limited vessel handling 

experience to enable them to safely operate their 

boat in a law enforcement capacity. Many of 

the courses are taught in an underway lecture 

and laboratory setting that maximizes the time 

spent on the water. The one-week program 

covers vessel handling and maintenance, 

inland navigation rules, safety and emergency 

procedures, and night piloting using the radar 

and global positioning system.

• Commercial Vehicle Counterterrorism Training 

Program (CVTTP). The Counterterrorism 

Division conducted the CVTTP in Tallahassee, FL 

for state and local government law enforcement 

officers. The CVTTP is designed to train law 

enforcement officers responsible for the 

enforcement of commercial vehicles traveling on 

the roadways and the extent these commercial 

vehicles can be used to commit terrorism acts, 

either as a weapon of mass destruction or 

transporting materials to further a terrorist cause. 

The CVTTP is unique in its design, recognizing 

that highway security is accomplished by a 

cooperative effort of Federal, state and local law 

enforcement officers.

• Tactical Threat Engagement (TTE). 

The Firearms Division introduced the TTE 

training to law enforcement officers enrolled 

in the Pilot Criminal Investigator Training and 

Uniformed Police Training Programs. The TTE 

focuses on tactical movements and movements 

with problem solving multiple threats including, 

offline, forward and backward and while firing 

a weapon. Students are also taught how to deal 

with a malfunctioning weapon during the course 

of firing. 

• Master Facility Construction Program.

In FY 2006, numerous facility construction 

and renovation projects were completed. The 

construction in progress account as of September 

30, 2006, is $48M for 45 ongoing projects. 

• Annual DHS Chief Financial Officer (CFO)

Management Conference. The FLETC Finance 

Division successfully hosted the annual 

conference held at Jekyll Island, Georgia in 

February 2006. The FLETC staff coordinated the 

logistics requirement for over 100 attendees and 

set up festivities, such as receptions, cookouts, 

and tour of the FLETC Glynco training facilities, 

including on-hand training at the driving and 

firearms ranges.
 2006 Performance Accountability Report 21

fletc

Analysis of Entity’s Financial Statements

The FLETC’s consolidated balance sheet appears in Part III with notes to the consolidated balance sheet 

and required supplementary information. This section includes key financial data relevant to the FLETC 

operations. 

 

Financial Resources and Key Indicators

Budgetary Resources

171

59

65

173

63

74

193

62

80

227

64

111

308

198

125

0

100

200

300

400

500

600

700

Millions

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Budgetary Resources

Budget Authority Reimbursement Other Resources

The FLETC’s budgetary resources continue to grow. Budgetary resources consist of the budget 

authority or annual appropriations, reimbursement for training services, and other resources 

comprised primarily of carryover funds for multi-year and no-year appropriations. The increase 

in budgetary resources for the past three years is attributed to an increase in FLETC’s annual 

appropriations of $81 million, or 36%, and a $134 million, or 209%, increase in earned 

reimbursement for training services.
22 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Net Cost of Operation

Net Cost of Operation and Number of Students and Student-Weeks 

(Thousands)

139

117 146

181 161

129

156

194

231

169

45 47 51

32 38

FY 2002 FY 2003 FY 2004 FY 2005 FY2006

Fiscal Year

No. of Student-Weeks Net Cost of Operation No. of Students Trained

The FY 2006 net cost of operation increased by $37 million, or 19%, from last fiscal year. The number of 

students trained and number of student-weeks increased by 9%, or 4 thousand students, and by 19%, or 

22 thousand student-weeks, respectively, from FY 2005. 

Category of Funds 

FY 2006 Total $631 Million

Construction

$268M,

42%

Training, 

$151M,

24%

S&E,

$212M,

34%

Of the $631 million total budgetary resources in FY 2006, 34%, or $212 million, was for salaries and 

expenses; 42%, or $268 million, for construction; and 24%, or $151 million, for training.
 2006 Performance Accountability Report 23

fletc

Program Expenses

FY 2006 Program Expenses

Supplies & 

Materials

3%

Miscellaneous

6%

Services

29%

Travel & 

Transportation

3%

Equipment 

4%

Depreciation & 

Maintenance

13%

Personnel 

Costs

42%

Of the $319 million gross program expenses in FY 2006, 42%, or $133 million, was spent on personnel 

compensation and benefits, an increase of 36% from last year. Also, 29%, or $92 million, was spent on 

services to support the training mission during FY 2006, an increase of 39% from FY 2005.

Assets 

419 454

475 524

629

0

100

200

300

400

500

600

700

Millions

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Total Assets

As of September 30, 2006, the value of the FLETC’s total assets is $629 million, an increase of 20%, or 

$105 million, from FY 2005, largely attributed to the fund balances from the additional appropriations in 

FY 2006 and the capitalization of additional real properties.
24 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Total Assets

Other,

$1M,

nm%

Fund

Balance, 

$202M,

32%

Property,

Plant & 

Equip,

$410M,

65%

Accounts

Receivable, 

$16M,

3%

The majority of the FLETC’s assets are comprised of plant, property, and equipment (PP&E) and Fund 

Balance with Treasury, totaling $410 million and $202 million, respectively, as of September 30, 2006. 

Property, Plant, and Equipment

283

324 339

353

410

0

50

100

150

200

250

300

350

400

450

Millions

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006

Property, Plant and Equipment

The value of the FLETC’s property, plant and equipment (PP&E) is $410 million as of September 30, 2006, 

an increase of 16%, or $57 million, from FY 2005, primarily due to the ongoing facility construction and 

building renovations.
 2006 Performance Accountability Report 25

fletc

The majority of the FLETC’s PP&E accounts are buildings and structures with net book value of $296 

million as of September 30, 2006. The value of the construction in progress account is $48 million as of 

September 30, 2006.

Exchange Revenue

Property, Plant and Equipment

Building & 

Structures,

$296M,

72%

Land,

$4M,

1%

Construction in 

Progress,

$48M,

11%

Capital Leases,

$56M,

14%

Equipment,

$3M,

1%

Internally 

Developed

Software,

$3M,

1%

55

1

63

2

57

2

68

2

88

2

0

10

20

30

40

50

60

70

80

90

MILLION

2002 2003 2004 2005 2006

FISCAL YEAR

EXCHANGE REVENUE

Federal Public

For FY 2006, the total exchange revenue amounted to $90 million of which $88 million and $2 million 

were derived from Federal and state and local agencies, respectively. The exchange revenue increased by 

29%, or $20 million, from FY 2005, primarily attributed to the Partner Organizations’ reimbursement to 

the FLETC for construction and renovation of facilities and increased training. 
26 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

95

98 98

99 99

80

100

PERCENT

2002 2003 2004 2005 2006

FISCAL YEAR

ACH PAYMENT

Automated Clearing House (ACH) Vendor Payments

ACH vendor payments continued to be maximized in FY 2006. ACH is an expeditious, cost-effective 

payment method that enhances accuracy and customer service to vendors.

Analysis of Systems, Controls and Legal Compliance 

Federal agencies are required to comply with a wide range of laws and regulations, and to maintain 

systems that generate timely, accurate and useful information with which to make informed decisions. 

This section provides information on the FLETC’s financial management system and compliance with the 

following:

	 The Federal Managers’ Financial Integrity Act (FMFIA)

	 The Federal Financial Management Improvement Act (FFMIA)

Federal Managers’ Financial Integrity Act

The Federal Managers’ Financial Integrity Act (FMFIA) requires agencies to establish management control 

and financial systems that provide reasonable assurance that the integrity of Federal programs and 

operations are protected. It also requires the head of the agency, based on an evaluation of systems and 

controls, provide an annual Statement of Assurance on whether the agency has met this requirement. 

For FY 2006, the Director of the FLETC has provided qualified assurance that the Agency management 

controls and financial control systems meet the objectives of Sections 2 and 4 of FMFIA.
 2006 Performance Accountability Report 27

fletc

In accordance with the FMFIA and OMB Circular A-123, the FLETC has evaluated its management controls 

and financial management systems for FY 2006. Through our evaluation process and the results of 

external and internal audit reviews, we are reporting the following Section 2 material weakness:

Failed control environment for the timely recognition of environmental clean up liability for 

firearms ranges.

Federal Financial Management Improvement Act

The Federal Financial Management Improvement Act of 1996 (FFMIA) requires that agencies’ financial 

management systems provide reliable financial data in accordance with generally accepted accounting 

principles and standards. Under FFMIA, financial management systems must substantially comply with 

three requirements – Federal financial management system requirements, applicable Federal accounting 

standards, and the U.S. Government Standard General Ledger (SGL). For FY 2006, the FLETC noted some 

instances of non-compliance with the provisions of FFMIA. Corrective actions are being implemented for 

future compliance.

Legal Compliance

The FLETC is committed to ensuring its financial activities are carried out in full compliance with 

applicable laws and regulations. To ensure this responsibility is met, senior Agency financial managers 

direct annual reviews of financial operations and programs compliance with applicable laws and 

regulations. For FY 2006, the FLETC complied substantially with all laws and regulations considered 

material to internal control over financial reporting.

Management Assurances

In accordance with the Department of Homeland Security Financial Accountability Act and the Federal 

Managers’ Financial Integrity Act, the FLETC has conducted an evaluation of its internal controls. Based on 

this evaluation, the following assurance statement is provided.
28 Federal Law Enforcement Training Center

Management’s Discussion and Analysis
 2006 Performance Accountability Report 29

fletc
30 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Responsible Julie Martin 

Assigned Julie Martin 

Status In Progress 

%Complete 50%

Category Material Weakness Corrective Action Plan 

Responsible Organization Federal Law Enforcement Center (FLETC) 

Due Date 11/30/2006

Related NFRs Federal Law Enforcement Training Center (FLETC) – Environmental Liability 

Source of Control 

Deficiency IPA, Management 

Issue Description The existing control environment at the FLETC failed to accurately assess and 

promptly recognize environmental clean up cost liabilities to remediate 

indoor/outdoor firearms ranges. The FLETC recorded an additional $11M 

environmental clean up cost liability in FY 2006 for its indoor/outdoor 

firearms ranges. 

Key Success Factors Correct the failed control environment by implementing Standard Operating 

Procedures (SOP) on real property management and financial reporting 

procedures that include assessment and routine reporting of environmental 

issues by the FLETC Environmental and Safety Division to the FLETC 

Finance Division for timely recognition and disclosure of all FLETC 

environmental liabilities. 

Key Performance 

Measures

SOPs are approved and implemented. Records of environmental assessments 

are available and accessible. Computation of environmental clean up cost 

liabilities is properly substantiated. 

Verification and 

Validation 

The FLETC Finance Division will review the documentation provided by the 

FLETC Environmental and Safety Division for completeness and to ensure 

that the document package supports the cost estimates. No further material 

weaknesses are reported by the IPA. 

Risks and Impediments Due to cross-functional coordination, there could be a lack of communication 

and understanding of the technicality of the environmental and accounting 

issues between the FLETC environmental and accounting staff. 

Resources Required None 

Audit Report 

Recommendation N/A due to IPA report not being complete. 
 2006 Performance Accountability Report 31

fletc

Outline

# Topic Due Date

Requested 

Revised 

Due Date Status

 1 

Complete assessment and recognition of all measurable and 

probable FLETC environmental clean up cost liabilities. 9/30/06 Completed 

2 Draft and implement new SOPs establishing the assessment 

and reporting of environmental liabilities. 11/30/06 10/30/06 Completed

 3 

FLETC environmental and accounting staff to meet and 

clarify any questions regarding environmental clean up cost 

liability reporting requirements. 

1/31/07 11/15/06 Completed

 4 

FLETC accounting staff to test, validate and compare the 

current inventory of facilities and structures supporting the 

latest recognition of environmental clean up cost liability 

list with the updated records held by FLETC environmental 

staff.

3/31/07 11/30/06 Completed
32 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Improper Payments Information Act (IPIA) Reporting

Improper payments at the FLETC are at low risk based on the assessment of risk factors established by DHS. 

This assertion was further substantiated by the result of a random sampling of payment vouchers in FY 

2006 that yielded almost no occurrence of improper payment in the FLETC law enforcement training and 

other support programs. The FLETC will continue to strengthen its internal controls to guard against any 

improper payments.

Other Management Information, Initiatives and Issues

FUTURE EFFECTS ON EXISTING, CURRENTLY KNOWN DEMANDS, RISKS, UNCERTAINTIES, 

EVENTS, CONDITIONS, AND TRENDS

The following chart summarizes the projections for law enforcement training for the next two years: 

Students Student-Weeks Students Student-Weeks

Basic 16,500 141,700 17,100 141,700

Advanced 34,400 34,400 31,100 31,100

S&L, Int'l & Export 4,800 4,800 4,600 4,600

Total 55,700 177,400 56,300 177,400

FY2007 FY2008

Historically, the FLETC has encountered difficulty recruiting and retaining law enforcement instructors 

with extensive Federal Criminal Investigator (GS-1811) experience. The FY 2002 Emergency 

Appropriations bill improved the FLETC’s hiring flexibility by granting a salary offset waiver authority 

for up to 250 rehired annuitants for a five-year period. The FY 2007 Appropriations bill authorizes an 

increase in the number of rehired annuitants from 250 to 350 through December 31, 2007. 

The FLETC continues facing operational constraints in balancing available resources and customer demand. 

To meet these challenges, the FLETC is implementing several initiatives to ensure its partner organization 

and other customers are provided with timely and cost-effective law enforcement training.

First, the Facilities Master Plan continues to evolve as projected physical resource requirements necessary to 

fulfill the mission expand. The FLETC will aggressively seek funding to acquire, implement and maintain 

the physical resources outlined in the Facilities Master Plan. Second, human capital constraints have been 

relaxed by legislation granting the FLETC rehire annuitant authority. With the increase in authority from 

250 to 350, the availability of qualified law-enforcement instructors necessary to meet current demand 

will increase. Finally, the FLETC is developing an automated scheduling system known as the Student 

Administration and Scheduling System (SASS). The SASS initiative addresses the challenges of increased 

demand for law enforcement training and the ability to provide training on demand. 

In addition to addressing risks associated with operational constraints, the FLETC is actively pursuing 

the integration of emerging technologies into the training environment. The goal is to increase training 

efficiency, student throughput, and training safety through the use emerging technologies such as 
 2006 Performance Accountability Report 33

fletc

simulation and modeling. Strategic implementation objectives of deployment include integrating 

enterprise-wide technological training solutions in a cross-divisional training approach. This strategy 

enables the FLETC to leverage future investments in technology and continue providing the most effective 

and efficient law enforcement training available. 

Over its history, the FLETC has developed a sustainable competitive advantage as the premiere provider 

of law enforcement training. The process leading to the current organizational structure has required 

constant change, adaptability and effective strategic management processes. Continued recognition as the 

leading provider of law enforcement training will require increased awareness of risks faced in today’s 

dynamic marketplace. Those risks include increased competition, legislative risks, technological changes 

and changing customer demands, to name a few.

THE PRESIDENT’S MANAGEMENT AGENDA

The President’s Management Agenda (PMA), implemented in 2002, is an aggressive strategy for improving 

the management of the Federal government. It focuses on six areas of management that had apparent 

deficiencies across the government, and that had opportunities for improvements and progress to be made. 

The status and progress in implementing the PMA is tracked quarterly on a PMA Scorecard. The FLETC 

was the only DHS bureau that scored one yellow in status and all greens in every other measure.
34 Federal Law Enforcement Training Center

Management’s Discussion and Analysis

Limitations of the Financial Statements

The principal financial statements have been prepared to report the financial position and results of operations of the entity, pursuant to the requirements of 31 U.S.C. 3515 (b). While the statements have been 

prepared from the books and records of the entity in accordance with GAAP for Federal entities and the 

formats prescribed by OMB, the statements are in addition to the financial reports used to monitor and 

control budgetary resources which are prepared from the same books and records.

The statements should be read with the realization that they are for a component of the U.S. Government, a 

sovereign entity.
 2006 Performance Accountability Report 35

fletc

Office of Cheltenham Operations | 

This office administers the delivery

of law enforcement training 

programs in Cheltenham, Maryland 

and manages all logistical and 

support activities for its operation.
36 Federal Law Enforcement Training Center

We train those who protect our homeland
Performance & Accountability Report

Fiscal Year 2006

The Federal Law Enforcement Training Center

glynco | Artesia | charleston | cheltenham | ilea botswana | ILEA san salvador

Part II Strategic Plan and Performance
38 Federal Law Enforcement Training Center

Strategic Plan and Performance

FLETC Strategic Plan

Vision

We must provide fast, flexible and focused 

training to secure and protect America. 

Mission

We train those who protect our homeland. 

Values

Our values are the foundation upon which we 

accomplish our mission. 

Respect: We treat each other and those we

serve with fairness, dignity, and compassion. 

We value differences in people and ideas. 

We are committed to the well-being of our 

employees and to providing opportunities for 

individual growth and development.

Integrity: We adhere to the highest standards

of ethical behavior.

Service: We seek to provide the highest levels

of service to our Partner Organizations. We 

are effective and responsible stewards of the 

taxpayers’ dollars. 

Excellence: We pursue the highest quality

of leadership and service and recognize the 

importance of identifying, articulating, and 

responding to the interests and needs of the 

FLETC’s diverse constituencies.

Strategic Goals

Based upon this foundation, we have built four 

goals as pillars to enable us to achieve our vision 

and accomplish our mission.

1. Provide training that enables our partners to

accomplish their missions.

2. Foster a high-performing workforce.

3. Provide mission-responsive infrastructure.

4. Optimize business practices.
 2006 Performance Accountability Report 39

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Performance Goals 

and Results

The Performance Report provides a summary 

discussion of FLETC’s four strategic goals and 

reports on the main measures by defining the 

program objectives, FY 2006 target and actual 

performance, and providing a clear picture of 

how the FLETC is working towards accomplishing 

its mission. We recognize that performance 

information is vital to making resource allocation 

decisions and is an integral part of the budget. 

Performance measurement is an iterative process. 

We strive to present the highest-level outcomeoriented measures available. Measures are refined 

each year. Overall, changes in performance 

measurement fall into three categories: 1) the 

measure has been modified slightly as better data 

have become available; 2) the measure is new 

to the report; and 3) the title has been modified 

for clarity; however, the reported data remains 

unchanged. 

Throughout FY 2006, we continually improved our 

measures by establishing long-term performance 

goals and measures with aggressive targets. We 

aligned the performance measures to the following 

two budget programs to best reflect the FY 2006 

results: 

1. Federal Law Enforcement Training

2. Accreditation

The following charts show the main outcome 

measure for each program and the supporting 

measures that reflect the results related to our 

strategic plan. 
40 Federal Law Enforcement Training Center

Strategic Plan and Performance

Performance Goal: Accredit all Federal law enforcement training. 

Performance

Measure: 

Total number of programs accredited and re-accredited through Federal 

Law Enforcement Training Accreditation (FLETA). 

Fiscal Year: FY 2004 

Actual 

FY 2005 

Actual 

FY 2006 

Target 

FY 2006 

Actual 

FY 2006 

Results 

Target/Actual 

Indicator: N/A 2 5 7 Met

Description: 

The number of Federal law enforcement programs accredited through 

the Federal Law Enforcement Training Accreditation process. This 

process provides standards to ensure that graduates have the 

knowledge and skills to fulfill their responsibilities to prevent terrorism 

and other criminal activities against the US and our citizens in a safe and 

proficient manner. 

Explanation of FY 

2006 Results: 

Having solid training programs that adhere to Department standards is 

important to our nation’s safety and security. The Department exceeded

its goal by two programs. The following programs were accredited: the 

U.S. Dept. of State’s Basic Special Agent Course (BSAC), the U.S. 

Postal Inspection Service’s Basic Inspector Training (BIT)and Postal 

Police Officer Basic Training (PPOBT), and the Federal Law 

Enforcement Training Center’s Law Enforcement Instructor Training 

Program (LEITP). Academies Accredited include: the U.S. Postal 

Inspection Service’s, Career Development Division, the U.S. Air Force 

Special Investigations (AFOSI) Academy, and the Federal Law 

Enforcement Training Center (FLETC). The accreditation of a Federal 

Law Enforcement academy or program provides assurance that they 

have voluntarily submitted to a process of self-regulation; and, that they 

have successfully achieved compliance with a set of standards that have 

been established within their professional community that demonstrate 

their adherence to quality, effectiveness and integrity. 

Objective/s 

Supported:

2.4 - Coordinate national and international policy, law enforcement, and 

other actions to prevent terrorism. 

Program: Accreditation - Federal Law Enforcement Training Center 
 2006 Performance Accountability Report 41

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Performance Goal: Provide the knowledge and skills to enable law enforcement agents and 

officers to fulfill their responsibilities.

Performance

Measure: 

Percent of students that express excellent or outstanding on the Student 

Quality of Training Survey (SQTS). 

Fiscal Year: FY 2004 

Actual 

FY 2005 

Actual 

FY 2006 

Target 

FY 2006 

Actual 

FY 2006 

Results 

Target/Actual 

Indicator: N/A 64% 66% 62% Not Met 

Description: 

This measure is an indicator of the degree of training quality received 

based on the student's feedback. The SQTS is a formal means to 

identify opportunities for immediate improvements and updates to 

ensure that the student receives the right skills and knowledge, 

presented in the right way and right time. The Federal Law Enforcement 

Training Center (FLETC) biannually and annually summarizes the 

feedback from graduates of the FLETC’s basic training programs. 

Explanation of FY 

2006 Results: 

FLETC established and maintained a robust process to examine law 

enforcement trends and emerging issues. FLETC collaborates with 

Partner Organizations to assess, validate and improve each program as 

they are constantly evolving and being refined in response to emerging 

issues such as changes in the laws, mission emphasis, and Partner 

Organization’s requirements. Although we did not meet out target of 

66%, we will continue to hold ourselves to continuously higher standards 

in the future. Training programs that meet the end-users needs is 

important to our nation’s safety and security 

Recommended 

Action: 

The Federal Law Enforcement Center is currently collaborating with the 

students and Partner Organizations to determine what we can do to 

improve training to ensure students receive the right skills and 

knowledge, presented in the right way and at the right time to prevent 

terrorism and other criminal activity against the US and our citizens. 
42 Federal Law Enforcement Training Center

Strategic Plan and Performance

Performance

Measure: 

Percent of Partner Organizations (POs) that express an agree or 

strongly agree on the Partner Organization Satisfaction Survey (POSS) 

Fiscal Year: FY 2004 

Actual 

FY 2005 

Actual 

FY 2006 

Target 

FY 2006 

Actual 

FY 2006 

Results 

Target/Actual 

Indicator: 92.7% 92.7% 82% 95% Met

Description: 

The percentage of Federal agencies and organizations that indicate 

satisfaction with the law enforcement training and services provided by 

the Federal Law Enforcement Training Center to prevent terrorism and 

other criminal activity against the US and our citizens. 

Explanation of FY 

2006 Results: 

FLETC met its goal and achieved a 95% agree to strongly agree rating 

by its participants. Training programs that meet the end-users needs is 

important to our nation’s safety and security. FLETC is committed to 

providing the best training possible to all law enforcement organizations 

that we serve by establishing and maintaining robust processes to 

examine law enforcement trends and emerging issues. We collaborate 

with our Partner Organizations to assess, validate and improve each 

program as they are constantly evolving and being refined in response 

to emerging issues such as changes in the laws, mission emphasis, and 

Partner Organization’s requirements. Through this collaboration with our 

Partner Organizations, the Federal Law Enforcement Training Center is 

able to provide the agencies with law enforcement agents and officers, 

skilled in the latest techniques, to enforce laws and regulations, protect 

the Nation, and interact with the public with respect for individuals and 

civil liberty. 
 2006 Performance Accountability Report 43

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Performance

Measure: 

Percent of Federal supervisors that rate their FLETC basic training 

graduate's preparedness as good or excellent 

Fiscal Year: FY 2004 

Actual 

FY 2005 

Actual 

FY 2006 

Target 

FY 2006 

Actual 

FY 2006 

Results 

Target/Actual 

Indicator: 73.4% 90% 73% 71% Not Met 

Description: 

The percentage of Federal law enforcement supervisors of basic training 

graduates of the Federal Law Enforcement Training Center, who after 

eight to twelve months of observing their officers or agents, indicate via 

survey their employees are highly prepared with the right knowledge 

and skills to perform their entry-level duties and responsibilities to 

prevent terrorism and other criminal activity against the US and our 

citizens. 

Explanation of FY 

2006 Results: 

The supervisors’ feedback provides the FLETC with a continuous 

assessment and validation of our training programs. This helps to 

ensure that law enforcement officers and agents receive the right 

training to keep pace with the changing criminal and law enforcement 

environment. Through this collaboration with our Partner Organizations, 

the Federal Law Enforcement Training Center is able to provide the 

agencies with law enforcement agents and officers, skilled in the latest 

techniques, to enforce laws and regulations, protect the Nation, and 

interact with the public with respect for individuals and civil liberty. 

Although we did not achieve our goal and saw a significant decline from 

FY 2005, we are committed to continuously higher achievement 

standards. 

Recommended 

Action: 

We will collaborate with our Partner Organizations to identify areas for 

improvement in our curriculum to ensure we provide them with 

graduates that are highly prepared with the right knowledge and skills to 

perform their entry-level duties and responsibilities to prevent terrorism 

and other criminal activity against the US and our citizens. 

Objective/s 

Supported:

2.4 - Coordinate national and international policy, law enforcement, and 

other actions to prevent terrorism. 

Program: Law Enforcement Training - Federal Law Enforcement Training Center 
44 Federal Law Enforcement Training Center

Strategic Plan and Performance

FLETC Strategic and Performance Plan Linkage

FY 2006-2011 

Strategic Goals Long-term Performance Goals 

a. By 2012, 88% of Partner Organizations express a high rate 

of overall satisfaction on the Partner Organization 

Satisfaction Survey. 

% of Federal supervisors agree FLETC graduates are 

highly prepared to perform their law enforcement 

functions. 

FY 2006 Target 73% 

FY 2007 Target 74% 

FY 2008 Target 75% 

FY 2009 Target 77% 

FY 2010 Target 79% 

FY 2011 Target 79% 

b.

FY 2012 Target 80% 

% of FLETC graduates agree they were highly prepared to 

perform their law enforcement functions upon graduation. 

FY 2006 Target 60% 

FY 2007 Target 62% 

FY 2008 Target 64% 

FY 2009 Target 66% 

FY 2010 Target 68% 

FY 2011 Target 69% 

c.

FY 2012 Target 70% 

% of students rate the quality of FLETC law enforcement 

training as excellent or outstanding. 

FY 2006 Target 66% 

FY 2007 Target 67% 

FY 2008 Target 68% 

FY 2009 Target 69% 

FY 2010 Target 70% 

FY 2011 Target 71% 

1. Provide training that enables our partners to 

accomplish their missions. 

d.

FY 2012 Target 72% 

2. Foster a high-performing workforce. a. Annually, 70% of employees express overall satisfaction 

on the FLETC Employee Satisfaction Survey. 

a. Annually, 98% of requested training programs are 

conducted. 3. Provide mission-responsive infrastructure. 

b. Annually, 80% of training projections are scheduled. 

a. Annually, achieve the most efficient cost-per student-week 

4. Optimize business practices. of training. 

b. Accredit all Federal law enforcement training. 
 2006 Performance Accountability Report 45

fletc

Major Activities and Priorities

 The FLETC’s mission is to serve as the Federal 

government’s leader for and provider of worldclass law enforcement training. We prepare new 

and experienced law enforcement professionals to 

fulfill their responsibilities safely and proficiently. 

The average basic student spends 12 weeks at 

FLETC and receives instruction in all phases of law 

enforcement from firearms and high-speed vehicle 

operations to legal case instructions and defendant 

interview techniques. We accommodate the 

students’ housing, food, laundry and subsistence 

needs to allow them to totally focus on their 

training. We also ensure that training is provided in 

the most cost-effective manner by taking advantage 

of economies of scale available only from a 

consolidated law enforcement training organization.

We are committed to providing strong, collaborative 

leadership for law enforcement training. Working 

as partners with client agencies, including state, 

local and international organizations, we identify 

ways that research, training, and education can be 

used to protect our democratic institutions, ensure 

public safety, and preserve law and order.

Major instructional areas include firearms, 

driver training, physical techniques, legal, 

counterterrorism, forensics and investigative 

technologies, computer and financial investigations, 

and behavioral science. The major portion of 

the FLETC’s training activity is devoted to basic 

programs for criminal investigators and uniformed 

police officers who have the authority to carry 

firearms and make arrests. The basic programs 

consist of classroom instruction and hands-on 

practical exercises. Students must apply their 

classroom knowledge during exercises that simulate 

typical situations encountered on the job. To add 

realism, these exercises often involve role players 

who act as victims, witnesses or suspects. 

At the FLETC, students learn not only the 

responsibilities of law enforcement personnel, 

but through interaction with students from many 

other agencies, they also become acquainted with 

the missions and duties of their colleagues. This 

interaction provides the foundation for a more 

cooperative Federal law enforcement effort. 

The instructor cadre at the FLETC consists of 

permanent FLETC employees and Federal officers 

and investigators on short-term detail assignment 

from their parent organizations. This mix of 

permanent and detailed instructors provides a 

balance of experience and fresh insight from the 

field. 

Strategic Priorities

The strategic priorities of the FLETC focus on 

expanding training programs through partnership 

and emerging technology. The law enforcement 

personnel training at the FLETC are the primary 

resources used to fight the war on terrorism and 

to make the homeland more secure. The FLETC 

concentrates its efforts on:
46 Federal Law Enforcement Training Center

Strategic Plan and Performance

• Innovative development and integration of alternative training technologies, especially simulation

and modeling. Simulation technology emulates highly dangerous law enforcement driving 

scenarios and environments in a controlled setting that cannot be staged due to inability to replicate 

environment, conditions and safety concerns. Current methods in use permit the actual driving at 

real-speeds, allowing the student to understand principles of vehicle dynamics and driver controls 

within established time limits. Simulation technology for driver training emulates rural/urban/city 

environments, vehicle/pedestrian conflicts, time of day and weather. This training can measure the 

student’s knowledge for point of possible perception, point of actual perception, reaction time and 

point of no avoidance to each particular set of conflicts. The performance goal is to reduce frequency, 

severity and vehicle fatalities for operational accidents by law enforcement agents and officers. The 

construction of a simulation training facility continued in FY 2006 with an estimated completion date 

of October 2006. 

• Intelligence Training: Integrating homeland security and law enforcement requires effective

surveillance and intelligence functions. In response to the most immediate need for intelligence 

awareness training, the FLETC developed the Anti-terrorism Intelligence Awareness Training Program 

which specifically targeted line officers and supervisors in the law enforcement community in 

FY 2004. In FY 2006, this program continued to be delivered at various geographic locations to 

accommodate as many law enforcement personnel as possible. The FLETC is also working with the 

DHS Information Analysis and Infrastructure Protection Directorate to develop a common means of 

collecting, developing, analyzing, processing and sharing of intelligence. This initiative will promote 

intelligence analysis and sharing between Federal, state, local and tribal law enforcement officers.

• Counterterrorism: In response to changing mission requirements, FLETC, in conjunction with

our Partner Organizations, developed the design and training requirements for the Counter Terrorism 

Operations Training Facility (CTOTF), which completed construction in FY 06. This facility consists of 

four different environments – urban, suburban, inter-modal and international training areas – which 

are designed to replicate both foreign and domestic settings. It offers a variety of training venues, 

such as apartments, row houses, neighborhoods, schools, federal buildings, an embassy, roadways, 

and public transportation. In FY 2004, the training needs assessment was validated and the design 

and initial construction commenced for the inter-modal and international training sites. While this 

facility is multi-phased through FY 2011, the initial training began in FY 2005. This facility which 

consolidates anti/counter terrorism training will better prepare law enforcement personnel to fight 

terrorism. 
Performance & Accountability Report

Fiscal Year 2006

The Federal Law Enforcement Training Center

glynco | Artesia | charleston | cheltenham | ilea botswana | ILEA san salvador

Part III Financial Information
48 Federal Law Enforcement Training Center 

Message from the 

Chief Financial Officer

Federal Law Enforcement Training Center

U.S. Department of Homeland Security

1131 Chapel Crossing Road

Glynco, Georgia 31524

The FLETC Fiscal Year (FY) 2006 Performance and Accountability Report (PAR) 

provides an overview of the financial results of the year and discusses important 

matters of financial management. As the FLETC Chief Financial Officer, I 

am proud to report that the FLETC successfully complied with new financial 

management requirements introduced during FY 2006, and continues to provide 

quality service while demonstrating fiscal responsibility. 

During FY 2006, the FLETC performed further examination and analysis of 

its internal controls over financial reporting. The FY 2006 efforts resulted in 

creation of additional policies and procedures to strengthen areas of weakness, 

and will drive the continued efforts in the coming year’s audit over the 

controls. As directed by the Office of Management and Budget (OMB), the 

FLETC is also providing assurances in compliance with the Federal Managers’ 

Financial Integrity Act of 1982 (FMFIA) and the Federal Financial Management 

Improvement Act of 1996 (FFMIA). The reported weaknesses have been 

addressed and Corrective Action Plans are in place. With the exception of the build-lease arrangement discussed 

below, full remediation is expected in FY 2007, and management sees no major impediments to correcting the 

weaknesses. 

As reported in previous PAR’s, the FLETC is waiting for a formal determination from the OMB as to whether the 

build-lease arrangement for three dormitories consummated in FY 2001 and FY 2002 is a capital or operating 

lease for budgetary purposes. For financial reporting purposes, the FLETC has recorded the liability as a capital 

lease and discloses the build-lease arrangement in the Notes to the Consolidated Balance Sheet. 

One new requirement for the FLETC was the transition from a limited scope audit over all of the FLETC financial 

statements to a full scope balance sheet audit as of September 30, 2006. The audit was performed by an 

independent auditor, KPMG LLP, and the auditors expressed an unqualified opinion on the FLETC’s balance sheet 

as of September 30, 2006. Their report is contained in the financial section of this PAR. In the performance of 

the FY 2006 audit, KPMG identified numerous reportable conditions related to significant deficiencies in the 

FLETC’s internal control over financial reporting, six of which are considered to also be material weaknesses. 

KPMG also identified material instances of non-compliance with laws and regulations during their FY 2006 audit. 

I am fully committed to implementing corrective actions to remedy these weaknesses in internal controls over 

financial reporting and compliance with laws and regulations. As of the date of this letter, the FLETC has already 

implemented policies and procedures to correct all of the findings noted in KPMG’s audit report. 

Financial responsibility is of utmost importance in fulfilling organizational missions, and in being accountable to 

Congress and the American public. The FLETC does not take this responsibility lightly. Our staff is knowledgeable 

and motivated to provide superior support, while continuing to strengthen internal controls and face new 

challenges. I am confident that in the coming year, the FLETC’s financial management will have continued success. 
 2006 Performance Accountability Report 49

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50 Federal Law Enforcement Training Center

Financial Information
 2006 Performance Accountability Report 51

fletc

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036 

INDEPENDENT AUDITORS’ REPORT

Inspector General 

U.S. Department of Homeland Security 

Director

The Federal Law Enforcement Training Center 

We have audited the accompanying consolidated balance sheet of the U.S. Department of Homeland 

Security’s (DHS) Federal Law Enforcement Training Center (FLETC) as of September 30, 2006 (referred 

to herein as “balance sheet”). The objective of our audit was to express an opinion on the fair presentation 

of the balance sheet. In connection with our audit, we also considered FLETC’s internal controls over 

financial reporting and performance measures; and tested FLETC’s compliance with certain provisions of 

applicable laws, regulations, and contract agreements that could have a direct and material effect on the 

balance sheet.

SUMMARY

As stated in our opinion on the balance sheet, we concluded that FLETC’s balance sheet as of September 

30, 2006 is presented fairly, in all material respects, in conformity with U.S. generally accepted accounting 

principles (GAAP).

As discussed in our opinion, in fiscal year 2006, FLETC changed its method of accounting for and 

reporting of earmarked funds to adopt changes in accounting standards and changed its method of 

accounting for operating supplies inventory. 

Our consideration of internal controls over financial reporting, and performance measures resulted in the 

following conditions being identified as reportable conditions: 

A. Financial Reporting 

B. Environmental Cleanup Costs 

C. Capital Lease Liabilities 

D. Valuation of Inventories 

E. Construction in Progress 

F. Accounts Payable 

G. Deferred Revenue 

H. Financial Systems Security 

We consider reportable conditions A through F above to be material weaknesses. 

The results of our tests of compliance with certain provisions of laws, regulations, and contract agreements, 

disclosed the following instances of noncompliance or other matters that are required to be reported under 

Government Auditing Standards, issued by the Comptroller General of the United States, and Office of 

Management and Budget (OMB) Bulletin No. 06-03, Audit Requirements for Federal Financial 

Statements:

I. Federal Financial Management Improvement Act of 1996 (FFMIA) 

J. Prompt Payment Act (PPA) 

KPMG LLP. KPMG LLP, a U.S. limited liability partnership, is 

a member of KPMG International, a Swiss cooperative. 
52 Federal Law Enforcement Training Center

Financial Information

We also reported other matters related to compliance with the Anti-deficiency Act.

The following sections discuss our opinion on FLETC’s balance sheet; our consideration of FLETC’s 

internal control over financial reporting and performance measures; our tests of FLETC’s compliance with 

certain provisions of applicable laws, regulations, and contract agreements; and management’s and our 

responsibilities. 

OPINION ON THE BALANCE SHEET 

We have audited the accompanying balance sheet of the Department of Homeland Security’s (DHS) 

Federal Law Enforcement Training Center (FLETC) as of September 30, 2006. 

In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial 

position of FLETC as of September 30, 2006 in conformity with U.S. generally accepted accounting 

principles.

As discussed in Note 1 to the balance sheet, FLETC changed its method of accounting for and reporting 

earmarked funds in fiscal year 2006 to adopt the provisions of the Federal Accounting Standards Advisory 

Board’s Statement of Federal Financial Accounting Standards (SFFAS) No. 27, Identifying and Reporting 

Earmarked Funds. Also as discussed in Note 1 to the balance sheet, FLETC elected to change its method 

of accounting for and reporting operating supplies inventory in fiscal year 2006 from the consumption 

method to the purchase method in accordance with SFFAS No. 3, Accounting for Inventory and Related 

Property.

The information in the Management’s Discussion and Analysis and Required Supplementary Information 

(RSI) sections is not a required part of FLETC’s balance sheet, but is supplementary information required 

by GAAP and OMB Circular No. A-136, Financial Reporting Requirements. We have applied certain 

limited procedures, which consisted principally of inquiries of management regarding the methods of 

measurement and presentation of this information. However, we did not audit this information and, 

accordingly, we express no opinion on it. 

Our audit was conducted for the purpose of forming an opinion on the balance sheet taken as a whole. The 

information in Part II - Strategic Plan and Performance and Part IV - Other Supplementary Information are 

presented for purposes of additional analysis and are not required as part of the balance sheet. This 

information has not been subjected to auditing procedures and, accordingly, we express no opinion on it. 

INTERNAL CONTROL OVER FINANCIAL REPORTING 

Our consideration of internal control over financial reporting would not necessarily disclose all matters in 

the internal control over financial reporting that might be reportable conditions. Under standards issued by 

the American Institute of Certified Public Accountants, reportable conditions are matters coming to our 

attention relating to significant deficiencies in the design or operation of the internal control over financial 

reporting that, in our judgment, could adversely affect FLETC’s ability to record, process, summarize, and 

report financial data consistent with the assertions by management in the balance sheet. 

Material weaknesses are reportable conditions in which the design or operation of one or more of the 

internal control components does not reduce to a relatively low level the risk that misstatements caused by 

error or fraud, in amounts that would be material in relation to the balance sheet being audited, may occur 

and not be detected within a timely period by employees in the normal course of performing their assigned 

functions. Because of inherent limitations in internal control, misstatements due to error or fraud may 

nevertheless occur and not be detected. 
 2006 Performance Accountability Report 53

fletc

In our audit, we noted certain matters, described in Exhibits I and II, involving internal control over 

financial reporting and its operation that we consider to be reportable conditions. We believe that the 

reportable conditions presented in Exhibit I are material weaknesses. Exhibit II presents the other 

reportable conditions. Exhibit IV presents the status of prior year reportable conditions. 

INTERNAL CONTROLS OVER PERFORMANCE MEASURES 

Under OMB Bulletin No. 06-03, the definition of material weaknesses is extended to other controls. 

Material weaknesses are reportable conditions in which the design or operation of one or more of the 

internal control components does not reduce to a relatively low level the risk that misstatements caused by 

error or fraud, in amounts that would be material in relation to a performance measure or aggregation of 

related performance measures, may occur and not be detected within a timely period by employees in the 

normal course of performing their assigned functions. Because of inherent limitations in internal control, 

misstatements due to error or fraud may nevertheless occur and not be detected. 

Our consideration of the internal control over the existence and completeness assertions related to key 

performance measures would not necessarily disclose all matters involving the internal control and its 

operation related to the design and operation of the internal control over the existence and completeness 

assertions related to key performance measures that might be reportable conditions. 

In our audit, we noted no matters involving the design and operation of the internal control over the 

existence and completeness assertions related to key performance measures that we considered to be 

material weaknesses as defined above. 

COMPLIANCE AND OTHER MATTERS 

Our tests of compliance with certain provisions of laws, regulations, and contract agreements, as described 

in the Responsibilities section of this report, exclusive of those referred to in the Federal Financial 

Management Improvement Act of 1996 (FFMIA), disclosed two instances of noncompliance or other 

matters that are required to be reported under Government Auditing Standards or OMB Bulletin No. 06-03, 

and are described in Exhibit III. 

The results of our tests of compliance with certain provisions of other laws and regulations, exclusive of 

those referred to in FFMIA, disclosed no instances of noncompliance or other matters that are required to 

be reported under Government Auditing Standards or OMB Bulletin No. 06-03. 

The results of our tests of FFMIA disclosed instances, described in Exhibit III, in which FLETC’s financial 

systems did not substantially comply with Federal financial management system requirements, the United 

States Government Standard General Ledger at the transaction level, and Federal accounting standards. 

Other Matters

FLETC management has initiated a review of the classification of certain liabilities recorded in their 

accounting records that may identify a violation of the Anti-deficiency Act, or other violations of 

appropriation law, that may have occurred during fiscal year 2006 or during earlier years. 

 

* * * * * 

RESPONSIBILITIES

Management’s Responsibilities. The United States Code Title 31 Section 3515 and 9106 require 

agencies to report annually to Congress on their financial status and any other information needed to fairly 
54 Federal Law Enforcement Training Center

Financial Information

present their financial position and results of operations. To assist DHS in meeting these reporting 

requirements, FLETC prepares and submits financial statements in accordance with GAAP. 

Management is responsible for the balance sheet, including: 

x Preparing the balance sheet in conformity with GAAP; 

x Preparing the Management’s Discussion and Analysis (including the performance measures) and 

Required Supplementary Information; 

x Establishing and maintaining effective internal control; and 

x Complying with laws, regulations, and contract agreements, applicable to FLETC, including FFMIA. 

In fulfilling this responsibility, management is required to make estimates and judgments to assess the 

expected benefits and related costs of internal control policies. 

Auditors’ Responsibilities. Our responsibility is to express an opinion on the fiscal year 2006 balance 

sheet of FLETC based on our audit. We conducted our audit in accordance with auditing standards 

generally accepted in the United States of America; the standards applicable to financial audits contained in 

Government Auditing Standards, issued by the Comptroller General of the United States; and OMB 

Bulletin No. 06-03. Those standards and OMB Bulletin No. 06-03 require that we plan and perform the 

audits to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An 

audit includes consideration of internal control over financial reporting as a basis for designing audit 

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on 

the effectiveness of FLETC’s internal control over financial reporting. Accordingly, we express no such 

opinion. 

An audit also includes: 

x Examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet; 

x Assessing the accounting principles used and significant estimates made by management; and 

x Evaluating the overall balance sheet presentation. 

We believe that our audit provides a reasonable basis for our opinion.

In planning and performing our audit, we considered FLETC’s internal control over financial reporting by 

obtaining an understanding of FLETC’s internal control, determining whether internal controls had been 

placed in operation, assessing control risk, and performing tests of controls in order to determine our 

auditing procedures for the purpose of expressing our opinion on the balance sheet. We limited our internal 

control testing to those controls necessary to achieve the objectives described in Government Auditing 

Standards and OMB Bulletin No. 06-03. We did not test all internal controls relevant to operating 

objectives as broadly defined by the Federal Managers’ Financial Integrity Act of 1982. The objective of 

our audit was not to provide an opinion on the FLETC’s internal control over financial reporting. 

Consequently, we do not provide an opinion thereon. 

As required by OMB Bulletin No. 06-03, in our audit, with respect to internal control related to 

performance measures determined by management to be key and reported in the Management’s Discussion 

and Analysis and the Strategic Plan and Performance sections, we obtained an understanding of the design 

of significant internal controls relating to the existence and completeness assertions and determined 
 2006 Performance Accountability Report 55

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whether these internal controls had been placed in operation. We limited our testing to those controls 

necessary to test and report on the internal control over key performance measures in accordance with 

OMB Bulletin 06-03. However, our procedures were not designed to provide an opinion on internal 

control over reported performance measures and, accordingly, we do not provide an opinion thereon.

As part of obtaining reasonable assurance about whether FLETC’s balance sheet is free of material 

misstatement, we performed tests of FLETC’s compliance with certain provisions of laws, regulations, and 

contract agreements, noncompliance with which could have a direct and material effect on the 

determination of the balance sheet amounts, and certain provisions of other laws and regulations specified 

in OMB Bulletin No. 06-03, including certain provisions referred to in FFMIA. We limited our tests of 

compliance to the provisions described in the preceding sentence, and we did not test compliance with all 

laws, regulations, and contract agreements, applicable to FLETC. However, providing an opinion on 

compliance with laws, regulations, and contract agreements, was not an objective of our audit and, 

accordingly, we do not express such an opinion. 

Under OMB Bulletin No. 06-03 and FFMIA, we are required to report whether FLETC’s financial 

management systems substantially comply with (1) Federal financial management systems requirements, 

(2) applicable Federal accounting standards, and (3) the United States Government Standard General 

Ledger at the transaction level. To meet this requirement, we performed tests of compliance with FFMIA 

Section 803(a) requirements. 

We also noted certain additional matters that we have reported to the management of FLETC in a separate 

letter dated December 8, 2006. 

RESTRICTED USE

This report is intended solely for the information and use of FLETC management, DHS management, the 

DHS Office of Inspector General, OMB, the U.S. Government Accountability Office, and the U.S. 

Congress and is not intended to be and should not be used by anyone other than these specified parties. 

December 8, 2006 
56 Federal Law Enforcement Training Center

Financial Information

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

A. Financial Reporting 

Background: Prior to the enactment of the Department of Homeland Security Act in 2003, 

FLETC was a component of the U.S. Department of the Treasury and underwent an annual full 

scope audit of its financial statements. Since March 2003, FLETC has been audited as a 

component of U.S. Department of Homeland Security (DHS), and as such represented a small 

component of a much larger Department. The decision to audit FLETC’s FY 2006 balance sheet 

as a stand alone component resulted in a much closer examination of FLETC’s transactions and 

balances than in previous years’ Department level audits. 

Conditions: We noted internal control weaknesses over six significant balance sheet line items 

that require immediate improvement. Those six instances are presented in more detail in this 

report and consist of deficiencies in the following areas: 

3⁄4 Policies and procedures to ensure completeness, accuracy and valuation of FLETC’s 

estimated environmental liabilities;

3⁄4 Policies and procedures to ensure the proper accounting and financial reporting of 

FLETC’s lease transactions;

3⁄4 Valuation of operating materials inventories;

3⁄4 Capitalization of construction in progress accounts;

3⁄4 Lack of a methodology for approximating accounts payable at fiscal year-end; and 

3⁄4 Lack of a timely reconciliation of deferred revenue accounts. 

Criteria: OMB Circular A-136, Financial Reporting Requirements, requires DHS, and thus 

FLETC as a component of DHS, to report its financial transactions and related financial statement 

disclosures in accordance with the Circular. In addition, GAAP sets the requirements for the 

accounting treatment to be applied to transactions of Federal agencies, including the financial 

statement disclosures related to certain transactions. 

OMB Circular A-123, Section I, Introduction, states the following: 

“Management is responsible for developing and maintaining effective internal control. ... The 

importance of internal control is addressed in many statutes and executive documents. The 

FMFIA establishes overall requirements with regard to internal control. The agency head must 

establish controls that reasonably ensure that:...(iii) revenues and expenditures applicable to 

agency operations are properly recorded and accounted for to permit the preparation of accounts 

and reliable financial and statistical reports and to maintain accountability over the assets.” 

Cause/Effect: We believe this condition is a result of the following: 

x Lack of training and experience by those Finance Division professionals charged with 

responsibility for ensuring FLETC’s financial statements are prepared in accordance with 

GAAP; and

x Lack of formal guidance and continuous training of field staff to ensure that transactions are 

accounted for correctly at inception. 

As a result of the above deficiencies, FLETC was unable to timely prepare its adjusted trial 

balance and was required to record numerous adjusting journal entries to ensure that the balance 

sheet as of September 30, 2006 was prepared in accordance with GAAP. 

Recommendations: We recommend that FLETC Financial Division management: 
 2006 Performance Accountability Report 57

fletc

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

x Provide immediate and ongoing training to all personnel responsible for the preparation of 

FLETC’s financial statements;

x Design and implement a process that ensures all accounting transactions are recorded in 

accordance with GAAP;

x Establish formal channels of communication with each FLETC Division that provides the 

Finance Division estimates or information required for financial reporting and ensures, by 

training or other means, that the estimates and information provided are timely, properly 

supported, and compliant with GAAP; and

x Ensure that all FLETC personnel are made aware that financial reporting implications must 

be considered when entering into agreements and making budgetary decisions. 

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings and its comments 

were responsive to our recommendations. 

B. Environmental Cleanup Costs 

Background: FLETC maintains firing ranges for use in training its students in the use of various 

firearms required in their capacity as agents and law enforcement officers. Although FLETC has 

begun using reduced-hazard, or “green” ammunition where possible, the ammunition used in the 

past and currently in use for certain training applications contains lead and contaminates the soil 

in and around the ranges. FLETC is responsible for remediation of lead contamination at 34 

indoor and outdoor ranges. 

FLETC also has numerous buildings that contain asbestos and lead-based paint. As these 

buildings are renovated for future use or demolished in preparation for construction of new 

buildings, the asbestos and lead-based paint contamination must be contained and remediated by 

FLETC.

Conditions: FLETC does not have policies and procedures in place to ensure that it is able to 

efficiently and effectively develop reasonable estimates of its environmental liabilities in 

accordance with GAAP. As a result, FLETC initially recorded a pre-audit liability of only 

approximately $7,000 for remediation of lead contamination at firing ranges, and a general 

liability of $500,000 for all other cleanup cost that might arise. The estimates recorded as 

liabilities lacked any auditable support. In addition, no comprehensive study of the extent of lead, 

asbestos, or lead-based paint contamination was conducted, nor was an estimate of the cost for 

the remediation of the various types of contamination developed or otherwise considered. The 

final audited re-estimated liabilities prepared in accordance with GAAP amounted to 

approximately $58 million as of September 30, 2006. 

Criteria: OMB Circular A-123, Section I, Introduction, states the following: 

“Management is responsible for developing and maintaining effective internal control. ... The 

importance of internal control is addressed in many statutes and executive documents. The 

FMFIA establishes overall requirements with regard to internal control. The agency head must 

establish controls that reasonably ensure that:...(iii) revenues and expenditures applicable to 

agency operations are properly recorded and accounted for to permit the preparation of accounts 

and reliable financial and statistical reports and to maintain accountability over the assets.” 
58 Federal Law Enforcement Training Center

Financial Information

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

Statement of Federal Financial Accounting Standards (SFFAS) #5, Accounting for Liabilities of 

the Federal Government, provides the definition and general principle for recognition of 

liabilities in paragraph 19: “A liability for federal accounting purposes is a probable future 

outflow or other sacrifice of resources as a result of past transactions or events.” 

Federal Financial Accounting and Auditing Technical Release #2, Determining Probable and 

Reasonably Estimable for Environmental Liabilities in the Federal Government, states in footnote 

1 that “liabilities shall be recognized when the following conditions are met: 

x A past transaction or event has occurred, 

x A future outflow or other sacrifice of resources is probable, and 

x The future outflow or sacrifice of resources is measurable.” 

SFFAS #6, Accounting for Property, Plant, and Equipment, defines clean-up costs in paragraph 

85 as: “...the costs of removing, containing, and/or disposing of (1) hazardous waste from 

property, or (2) material and/or property that consists of hazardous waste at permanent or 

temporary closure or shutdown of associated PP&E.” Furthermore, paragraph 87 clarifies that 

“Cleanup may include, but is not limited to, decontamination, decommissioning, site restoration, 

site monitoring, closure, and post closure costs.” 

Cause/Effect: FLETC does not have a process in place to periodically identify, estimate, and 

update as necessary the liability for environmental cleanup costs for use in complying with 

Federal accounting and financial reporting requirements. 

As a result of the above deficiencies, FLETC was unable to timely prepare its adjusted trial 

balance and was required to record material adjusting journal entries to properly state its 

environmental liabilities as of September 30, 2006. Additionally, FLETC’s note disclosures also 

required substantial modification to ensure compliance with GAAP. 

Recommendations: We recommend that FLETC management: 

x Train personnel in the Facilities Division and the Environmental and Safety Division on the 

accounting and financial reporting requirements for environmental liabilities, as well as 

development of the auditable support for the variables and assumptions that make up the 

estimate and recorded liability; 

x Design and implement a process for periodically estimating, updating, and reporting 

environmental liabilities to the Finance Division for use in complying with financial reporting 

requirements; 

x Ensure that all estimates of environmental liabilities are reviewed and approved by Finance 

Division management to ensure the estimates are reasonable and accompanied by auditable 

supporting documentation; and 

x Formalize the policy on reporting and treatment of environmental liabilities by developing a 

written standard operating procedure (SOP) to help ensure FLETC’s procedures are in 

accordance with the applicable accounting standards pertaining to environmental cleanup 

costs.

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings and its comments 

were responsive to our recommendations. 
 2006 Performance Accountability Report 59

fletc

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

C. Capital Lease Liabilities 

Background: FLETC entered into three 20-year, non-cancelable leases for dormitory buildings 

during FY 2001 and FY 2002. The leases were initially classified and recorded as operating 

leases. The FY 2002 independent auditors, however, analyzed the lease agreements and 

determined the leases met the requirements for treatment as capital leases, and proposed that 

FLETC account for them as such. The leases were reported as buildings and offset by a 

contingent liability in FLETC’s FY 2002 financial statements and continued to be reported as a 

contingent liability through most of FY 2006. Since the inception of the leases, FLETC has 

depreciated the recorded cost of the buildings over the 20-year lease term. In addition, FLETC 

has recorded a reduction in the contingent liability and the related imputed interest expense with 

each lease payment. FLETC requested that the OMB review the details of the lease agreements 

and determine the classification of the leases as either capital or operating. OMB has not made a 

classification determination. 

Conditions: FLETC does not have adequate policies and procedures and internal controls to 

ensure that its lease transactions are accounted for in accordance with GAAP. As a result, KPMG 

noted:

x Since FY 2002, FLETC has been incorrectly reporting the lease liability totaling 

approximately $50 million as of September 30, 2006, as an unfunded contingent liability; 

x FLETC’s recorded monthly imputed interest expense associated with the capital lease 

payments was not determined using the required interest rate method. The imputed interest 

was determined for the entire lease term and equal amounts were recognized with each 

payment; and 

x The depreciation expense recorded on the three buildings was calculated incorrectly and 

would have resulted in full depreciation of the buildings in year 13 of the 20-year leases. 

Cause/Effect: These conditions initially arose in FY 2001 because there were no formalized 

policies and procedures that required FLETC’s Procurement Division to consult with the Budget 

and Finance Division prior to entering into lease transactions. The result was that three leases 

were unintentionally structured as capital leases. The lease liabilities were misclassified and 

improperly reported as contingent liabilities as a result of FLETC’s attempts to support a position 

that these leases should be classified as operating leases, pending a determination of classification 

by OMB, and thus avoid the OMB Circular A-11 requirement to fully fund capital leases at lease 

inception.

The misstatement of imputed interest on the lease payments and the miscalculation of the annual 

depreciation cost resulted from calculation errors made at the inception of the leases, which were 

not detected by a management review process that should take place when non-routine financial 

transactions are entered into and recorded in FLETC’s books and records. FLETC’s financial 

reporting since the inception of the lease agreements has cumulatively understated the imputed 

interest expense by approximately $13.2 million, overstated the depreciation of the buildings by 

approximately $7.3 million, understated the net book value of the leased buildings by $134,000, 

and understated the lease liability by $12.4 million. 

Criteria: OMB Circular A-123, Section I, Introduction, states the following: 
60 Federal Law Enforcement Training Center

Financial Information

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

“Management is responsible for developing and maintaining effective internal control. ... The 

importance of internal control is addressed in many statutes and executive documents. The 

FMFIA establishes overall requirements with regard to internal control. The agency head must 

establish controls that reasonably ensure that:...(iii) revenues and expenditures applicable to 

agency operations are properly recorded and accounted for to permit the preparation of accounts 

and reliable financial and statistical reports and to maintain accountability over the assets.” 

SFFAS #5 defines capital leases as “leases that transfer substantially all the benefits and risks of 

ownership to the lessee.” In paragraph 43, the following four criteria for determining whether 

leases should be classified as capital are detailed: 

x The lease transfers ownership of the property to the lessee by the end of the lease term. 

x The lease contains an option to purchase the leased property at a bargain price. 

x The lease term is equal to or greater than 75 percent of the estimated economic life of the 

leased property. 

x The present value of rental and other minimum lease payments, excluding that portion of the 

payments representing executory cost, equals or exceeds 90 percent of the fair value of the 

leased property.

If, at its inception, a lease meets one or more of the above four criteria, the lease should be 

classified as a capital lease by the lessee. It is noted that the third and fourth criteria above are 

not applicable when the beginning of the lease term falls within the last 25% of the estimated 

economic life of the leased property. An operating lease, however, is “an agreement conveying 

the right to use property for a limited time in exchange for periodic rental payments.” 

OMB Circular A-11, Appendix A, Scorekeeping Guidelines, Section 11, Scoring Purchases,

requires that all capital leases be fully funded at their inception and that risks should be carefully 

analyzed and managed. Specifically, OMB Circular A-11, Section 31.6, Full funding, states, 

“Requests for acquisition of capital assets must propose full funding to cover the full costs of the 

project or a useful segment of the project, consistent with the policy stated in section 300.6(b).” 

In addition, OMB Circular A-11, Appendix B, Budgetary Treatment of Lease-Purchases and 

Leases of Capital Assets, Section 1(b) states, “Unless otherwise specified by law, budget 

authority is available for liquidating obligations (i.e., outlays) for only five fiscal years after the 

authority expires. For leases financed by annual or multi-year budget authority, agencies should 

ensure that the appropriations language allows the budget authority to remain available for lease 

payments over the full term of the lease. If this period is expected to be longer than five fiscal 

years after the authority expires, the appropriations language should include the provision 

described in section 95.8.” 

The Anti-deficiency Act prohibits an officer or employee of the United States from making 

expenditures or incurring obligations before appropriations become available, unless otherwise 

authorized by law (31 U.S.C. § 1341). 

Lastly, per the U.S. Government Standard General Ledger (USSGL), capital lease liabilities are 

to be recorded in account 2940, Capital Lease Liabilities, rather than as a Contingent Liability. 

Recommendations: We recommend that FLETC management: 

x Design and implement a process that ensures the Procurement Division consults with the 

Budget and Finance Division prior to entering into transactions or agreements to determine 

the budgetary and financial reporting effects of the proposed transactions or agreements; and 
 2006 Performance Accountability Report 61

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Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

x Review all transactions prior to recording in FLETC’s books and records to ensure 

transactions are recorded in accordance with GAAP. 

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our finding that the cause/effect 

was a result of no formalized procedures that required FLETC’s Procurement Division to consult 

with the Budget and Finance Division prior to entering into lease transactions. However, 

management believes the misclassification of the lease liability as a contingent liability was a 

subsequent effect due to the fiscal year 2002 audit by other independent public auditors. 

Management stated that when the issue was raised during the 2002 audit, FLETC requested an 

OMB review and temporarily reported the lease liability as a contingent liability pending an 

OMB determination, which as yet has not been received. 

Auditors’ Response to Management’s Response As summarized above, management has not 

resolved the misclassification of the lease liability as a contingent liability. The Government 

Accountability Office states in section 1001.08 of its Financial Audit Manual that management’s 

representations to the auditor must acknowledge its responsibility for the financial statements and 

its belief that the financial statements are fairly presented in accordance with United States 

Generally Accepted Accounting Principles; completeness of financial information; recognition, 

measurement, and disclosure; and subsequent events. Therefore, we continue to believe that the 

misclassification of the lease liability was solely the responsibility of FLETC management, and 

that lack of resolution of the classification issue constitutes a material weakness in internal 

control.

D. Valuation of Inventories 

Background: FLETC maintains inventories of ammunition, uniforms and operating supplies 

necessary for use by its students during their training. FLETC elected to use the consumption 

method of recording its inventory, whereby the inventory items are expensed upon being 

withdrawn from inventory for use. Inventories totaled approximately $9.6 million at June 30, 

2006 and $10.3 million at September 30, 2006 

Conditions: FLETC does not have adequate policies and procedures and internal controls to 

ensure that it is valuing its inventories of the above materials in accordance with GAAP. As a 

result, KPMG noted: 

x FLETC was improperly applying the ‘latest acquisition cost’ method for valuing the 

inventory of uniforms. FLETC was not tracking the unrealized holding gain/loss related to 

the uniform inventory caused by a change in unit price. 

x FLETC did not have a process in place for aging uniform inventory, nor was a uniform 

inventory obsolescence reserve established. A uniform that had been issued, worn, and 

laundered multiple times was recorded for financial reporting purposes at the same cost of an 

item that had never been worn. 

x FLETC’s Deputy Chief Financial Officer confirmed that the other components of FLETC’s 

inventory (e.g., ammunition, gas & oil, and supplies, etc) were being valued in a similar 

manner as the uniforms. 

Cause/Effect: FLETC’s Finance Division did not adequately communicate the requirements for 

proper inventory valuation to the Student Services Division and the COTR over uniforms. In 
62 Federal Law Enforcement Training Center

Financial Information

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

addition, the Finance Division did not review the inventory valuation methodology being 

employed by the Student Services Division. The effect was the consistent misstatement of the 

inventory value for financial reporting purposes. FLETC elected to change its method of 

accounting for inventories to another acceptable method, the purchases method, for reporting in 

its September 30, 2006 consolidated balance sheet. 

Criteria: OMB Circular A-123, Section I, Introduction, states the following: 

“Management is responsible for developing and maintaining effective internal control. ... The 

importance of internal control is addressed in many statutes and executive documents. The 

FMFIA establishes overall requirements with regard to internal control. The agency head must 

establish controls that reasonably ensure that:...(iii) revenues and expenditures applicable to 

agency operations are properly recorded and accounted for to permit the preparation of accounts 

and reliable financial and statistical reports and to maintain accountability over the assets.” 

SFFAS #3, Accounting for Inventory and Related Property, defines the purchases method of 

accounting for inventory as “A method of accounting for goods, such as materials and supplies, in 

which the acquisition cost is recognized as an expense upon purchase of the goods rather than 

upon their use. Additionally, the consumption method is described as “A method of accounting 

for goods, such as materials and supplies, where the goods are recognized as assets upon 

acquisition and are expensed as they are consumed.” 

Paragraph 20 of SFFAS #3 states that “Inventory shall be valued at either (1) historical cost or (2) 

latest acquisition cost.” Furthermore, paragraph 23 continues: “The latest acquisition cost method 

provides that the last invoice price...be applied to all like units held including those units 

acquired through donation or non-monetary exchange. The inventory shall be revalued 

periodically but at least at the end of each fiscal year. Revaluation results in recognition of 

unrealized holding gains/losses in the ending inventory value.” Paragraph 24 states: “An 

allowance for unrealized gains/losses in inventory shall be established to capture these 

gains/losses.” The Department of Homeland Security (DHS) and its components (e.g. FLETC) 

must adhere to the requirements set forth in SFFAS #3.

Recommendation: We recommend that FLETC management continue its newly adopted 

purchases method of accounting for inventory, whereby inventory is expensed upon purchase. 

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings and its comments 

were responsive to our recommendations. 

E. Construction in Progress 

Background: At any point in time, FLETC has multiple on-going construction projects. These 

projects often involve modification or renovation of multiple buildings under a single contract. 

FLETC records the cost of the on-going construction in Construction in Progress (CIP) accounts. 

Upon completion, the total cost of the project is removed from the CIP accounts and recorded as 

in-service buildings or as appropriate. At that point, the assets are in-use and depreciation of the 

asset cost begins. 
 2006 Performance Accountability Report 63

fletc

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

Conditions: FLETC does not have adequate policies and procedures and internal controls in 

place to ensure that construction in progress accounts are accounted for in accordance with 

GAAP. As a result, KPMG noted: 

x FLETC occasionally uses the same project number to track costs associated with multiple 

buildings and is not always able to separate the project cost to be applied to each building 

included in the contract. In addition, FLETC occasionally establishes multiple project 

numbers under the same contract/delivery order and does not consistently apply expenditures 

related to progress billings to the appropriate project number. 

x FLETC does not always transfer completed CIP projects from CIP accounts to in-use 

property accounts on a timely basis. Our statistical selection of 22 projects from the CIP 

account revealed that 7 were completed projects during FY 2006 that should have been 

transferred to a property account and depreciated during FY 2006 by the Finance Division. 

The completed CIP projects that had not been transferred totaled approximately $5.2 million, 

and the evaluated statistical sample projected that the total account overstatement was 

approximately $12.1 million. FLETC reviewed the entire CIP list and made the necessary 

adjustments to transfer the completed CIP projects to the appropriate property accounts in 

accordance with GAAP. 

Cause/Effect CIP projects are not always allocated to the correct capital assets because there is 

no process in place to require vendors to separate the cost billed to FLETC by capital asset. 

Additionally, there is no methodology in place to allocate the cost of progress payments when 

there are multiple projects, and in some cases, costs are allocated to the projects with the oldest 

available funds to ensure there is sufficient funding to complete the project. 

CIP projects are not always transferred to property accounts and depreciated because Finance 

Division personnel do not routinely compare the Facilities Division’s ongoing CIP list to the CIP 

account in the general ledger and inquire whether differences should be transferred as completed 

projects.

Criteria: OMB Circular A-123, Section I, Introduction, states the following: 

“Management is responsible for developing and maintaining effective internal control. The 

importance of internal control is addressed in many statutes and executive documents. The 

FMFIA establishes overall requirements with regard to internal control. The agency head must 

establish controls that reasonably ensure that:...(iii) revenues and expenditures applicable to 

agency operations are properly recorded and accounted for to permit the preparation of accounts 

and reliable financial and statistical reports and to maintain accountability over the assets.” 

SFFAS #6, Accounting for Property, Plant, and Equipment, states: 

“All general PP&E shall be recorded at cost. Cost shall include all costs incurred to bring the 

PP&E to a form and location suitable for its intended use. For example, the cost of acquiring 

property, plant, and equipment may include: 

x amounts paid to vendors; 

x transportation charges to the point of initial use; 

x handling and storage costs; 

x labor and other direct or indirect production costs (for assets produced or constructed); 

x engineering, architectural, and other outside services for designs, plans, specifications, and 

surveys; 
64 Federal Law Enforcement Training Center

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Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

x acquisition and preparation costs of buildings and other facilities; 

x an appropriate share of the cost of the equipment and facilities used in construction work; 

x fixed equipment and related installation costs required for activities in a building or facility; 

x direct costs of inspection, supervision, and administration of construction contracts and 

construction work; 

x legal and recording fees and damage claims; 

x fair value of facilities and equipment donated to the government; and 

x material amounts of interest paid.” 

Paragraph 34 of SFFAS #6 states: “PP&E shall be recognized when title passes to the acquiring 

entity or when the PP&E is delivered to the entity or to an agent of the entity. In the case of 

constructed PP&E, the PP&E shall be recorded as construction work in process until it is placed 

in service, at which time the balance shall be transferred to general PP&E.” 

Recommendations: We recommend that FLETC management take the following steps: 

x Design and implement a process that ensures each project number applies to only one capital 

asset unit. (Conversely, FLETC may require the contractor to separate the costs of work 

performed on its contract invoices enabling FLETC to capture the cost to be applied to each 

unit).

x Develop and implement a formalized process to train project managers on the financial 

reporting requirements for CIP projects. 

x Implement the Real Property SOP issued by FLETC on October 27, 2006. Among the 

procedures established, the SOP requires: 

a. The Facilities Division submit copies of all Capitalization Reports to the Property 

Management Division and the Finance Division within 10 days of project completion or 

final decision of additional cost resulting from litigation. 

b. The Finance Division validate construction/renovation project costs in Capitalization 

Reports.

c. The Finance Division maintain the CIP subsidiary ledger by project numbers and funds. 

The Finance Division will compile copies of paid invoices/bills by CIP project numbers 

and provide copies to the Property Management Division upon validation of 

Capitalization Report costs. After submission of the Capitalization Reports, the Finance 

Division will follow-up with the Project Managers for completed construction/renovation 

projects listed in the CIP subsidiary ledger. 

x Develop and implement a quarterly process to reconcile CIP projects listed in the subsidiary 

ledger with on-going construction projects as recognized by the Facilities Management 

Division.

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings and its comments 

were responsive to our recommendations. 

F. Accounts Payable 

Background: FLETC has an established process for estimating its accounts payable liability for 

financial reporting purposes at year end. We discussed the estimation methodology used for each 

of the following transaction areas prior to beginning our audit procedures over accounts payable: 
 2006 Performance Accountability Report 65

fletc

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

travel expenses, purchase cards, goods and services received, recurring services, permanent 

change of station, and miscellaneous payables. 

Conditions: FLETC does not have adequate policies and procedures and internal controls to 

ensure that it has developed a reasonable estimate of its accrued liabilities as of fiscal year end in 

accordance with GAAP. As a result, KPMG noted: 

x FLETC’s process for accruing liabilities at the end of the fiscal year did not capture all the 

outstanding liabilities that existed at September 30, 2006. Our statistical sample of FLETC’s 

disbursements through October 25, 2006 resulted in 27 of the 96 selections containing 

unrecorded liabilities totaling approximately $3.8 million. A second non-statistical sample of 

disbursements through November 5, 2006 revealed another $3.8 million of liabilities not 

recorded as of September 30, 2006. 

x The majority of the under-accrual was in the area of service and construction contracts. 

Cause/Effect: FLETC’s accounts payable & accrued expenses balances were significantly 

understated because the accrual process did not operate as designed. The failure of the process 

was not detected because of insufficient management review and oversight of the process and the 

accrual that resulted. FLETC management subsequently re-estimated the accounts payable and 

accrued expense accrual as of September 30, 2006. Adjustments to the books and records were 

recorded as a result of the re-estimation. 

Criteria: OMB Circular A-123, Section I, Introduction, states the following: 

“Management is responsible for developing and maintaining effective internal control. ... The 

importance of internal control is addressed in many statutes and executive documents. The 

FMFIA establishes overall requirements with regard to internal control. The agency head must 

establish controls that reasonably ensure that:...(iii) revenues and expenditures applicable to 

agency operations are properly recorded and accounted for to permit the preparation of accounts 

and reliable financial and statistical reports and to maintain accountability over the assets.” 

Paragraphs 77-79 of the SFFAS #1, Accounting for Selected Assets and Liabilities, state:

77 When an entity accepts title to goods, whether the goods are delivered or in transit, the 

entity should recognize a liability for the unpaid amount of the goods. If invoices for 

those goods are not available when financial statements are prepared, the amounts owed 

should be estimated. 

78 When a contractor provides the government with goods that are also suitable for sale 

to others, the liability usually arises when the contractor physically delivers the goods and 

the government receives them and takes formal title. However, when a contractor builds 

or manufactures facilities or equipment to the government's specifications, formal 

acceptance of the products by the government is not the determining factor for 

accounting recognition. Constructive or de facto receipt occurs in each accounting period, 

in accordance with the following paragraph. 

79 For facilities or equipment constructed or manufactured by contractors or grantees 

according to agreements or contract specifications, amounts recorded as payable should 

be based on an estimate of work completed under the contract or the agreement. The 
66 Federal Law Enforcement Training Center

Financial Information

Independent Auditors’ Report 

Exhibit I – Material Weaknesses 

estimate of such amounts should be based primarily on the federal entity's engineering 

and management evaluation of actual performance progress and incurred costs. 

DHS and its components (e.g. FLETC) must adhere to the requirements set forth in SFFAS #1.

Recommendations: We recommend that FLETC management take the following steps: 

x Design, implement, and document an accrual process that will ensure each type of accounts 

payable is properly accrued for financial reporting purposes. This process should include a 

final review of the accrual details by senior management to ensure the process was properly 

executed and the accrual is reasonable. 

x Require the use of the accrual process to capture the financial reporting information required 

for inclusion in FLETC’s quarterly financial statements, as required by OMB Circular A-136. 

x Provide comprehensive training to every person involved in the accrual process. The training 

should include a discussion of the objective of the process, what each type of accounts 

payable requires to be accrued properly, the timing of the procedures to be performed, what 

form the reported results should take, to whom the results must be reported, and exactly how 

the information and methods used to obtain the information or estimate are to be documented 

for later examination by persons internal or external to FLETC. 

x Design and implement a plan to periodically review the reported accrual information provided 

by personnel both inside and outside the Finance Division. This will require a knowledgeable 

person going to the location of the individuals generating the accrual information and 

reviewing the accuracy of the information as well as the documentation as to how the 

information was obtained or estimated. 

x Assign one person in the Finance Division the responsibility for ensuring that each person 

designated to submit the quarterly accrual information submits the information on time and in 

the format required. Any late, incomplete, or undocumented submissions should be reported 

to senior Financial Division management as well as Management of the Division in which the 

designated individual works. 

x Include the timely and accurate submission of the accrual information as a part of each 

designated individual’s performance evaluation. 

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings and its comments 

were responsive to our recommendations. 
 2006 Performance Accountability Report 67

fletc

Independent Auditors’ Report 

Exhibit II – Reportable Conditions 

G. Deferred Revenue 

Background: FLETC’s recognizes in proportion to the training completed, e.g. half of the 

revenue is recognized as earned when a student has completed half the training. FLETC has a 

small proportion of its students that individually pay for their training rather than their sponsoring 

agency paying upon receipt of an invoice from FLETC. At the time of the individual payment, 

FLETC has often not prepared an invoice and recorded an accounts receivable. FLETC records 

and reports these individual payments as deferred revenue until FLETC staff have an opportunity 

to research the payment and properly account for it as revenue. The event that triggers the 

recording of the deferred revenue is not related to whether the student has completed any or all of 

the training for which the payment is made, but whether at the time of payment an accounts 

receivable has been recorded. 

Condition: We noted the following condition related to FLETC’s deferred revenue: 

x FLETC is not timely recognizing revenue from student tuition in those situations where 

payment is made prior to generation of an invoice and recording of the related accounts 

receivable. We statistically selected 23 payments for examination from the deferred revenue 

account and found that every selection was composed entirely or partially of unrecognized 

FY 2006 earned revenue from tuition. There were several instances where the student’s 

training was completed more than 3 months prior to the end of the fiscal year, yet the 

payment amount was still reported as deferred revenue.

Cause/Effect: Lack of internal controls over the recognition of revenues related to cash receipts 

from students who pay individually prior to the receipt of an invoice from FLETC. Additionally, 

in the preparation of FLETC’s consolidated balance sheet as of September 30, 2006, deferred 

amounts were not researched because management did not consider the potential misstatement 

material enough to justify the use of resources to correct the error. The effect is that deferred 

revenues are overstated by approximately $214,000 on the FLETC consolidated balance sheet as 

of September 30, 2006. 

Criteria: Paragraph 85 of the Statement of Federal Financial Accounting Standards (SFFAS) #1, 

Accounting for Selected Assets and Liabilities, states, “Before revenues are earned, the current 

portion of the advances and prepayments should be recorded as other current liabilities. After the 

revenue is earned, the entity should record the current liabilities appropriate amount as a revenue 

or financing source and should reduce the liability accordingly.” The U.S. Department of 

Homeland Security (DHS) and its components (e.g. FLETC) must adhere to the requirements set 

forth in SFFAS #1.

Recommendations: We recommend that FLETC management take the following steps: 

x Design and implement a process that ensures the research and monthly adjustment of the 

deferred revenue account to recognize revenue that has been earned. 

x Inform the Finance Division staff that the concept of “materiality” is not appropriate for use 

in determining whether to correctly record FLETC’s transactions. 
68 Federal Law Enforcement Training Center

Financial Information

Independent Auditors’ Report 

Exhibit II – Reportable Conditions 

Management’s Response: 

Management has prepared an official response presented as a separate attachment to this report. 

In summary, management agreed with our findings and its comments were responsive to our 

recommendations. 

H. Financial Systems Security 

Background: Controls over the FLETC information technology (IT) and related financial 

systems are essential elements of financial reporting integrity. Effective general controls in an IT 

and financial systems environment are typically defined in six key control areas: entity-wide 

security program planning and management, access control, application software development 

and change control, system software, segregation of duties, and service continuity. In addition to 

general controls, financial systems contain application controls which are the structure, policies, 

and procedures that apply to separate, individual application systems, such as accounts payable, 

inventory, payroll, or loans. 

During FY 2006, we performed audit procedures over the two key FLETC financial systems, 

Momentum and Procurement Desktop (PD), as well as those systems’ supporting the general 

control environment. The overall objective of our IT audit procedures was to evaluate the 

effectiveness of IT general controls of FLETC’s financial processing environment and related IT 

infrastructure as necessary to support the FY2006 FLETC consolidated balance sheet audit.

The Federal Information System Controls Audit Manual (FISCAM), issued by the Government 

Accountability Office (GAO), formed the basis of our review and was supplemented by the 

National Institute of Standards and Technology (NIST) Special Publication 800-53 and applicable 

DHS and FLETC policies and procedures.

To complement our general IT controls audit, we also performed technical security testing for key 

network and system devices, as well as testing over key financial application controls. The 

technical security testing was performed from within FLETC and was focused on test, 

development, and production devices that directly support FLETC financial processing and key 

general support systems. The application control testing included assessing the structure, 

policies, and procedures that apply to separate, individual application processes, such as accounts 

payable, and payroll. The application control testing was performed to assess the controls that 

support the financial system’s internal controls over the input, processing, and output of financial 

data and transactions. 

During FY 2006, we identified IT general control weaknesses at FLETC. The most significant 

weaknesses, from a balance sheet audit perspective, related to access controls and change 

controls. Collectively, the IT control weaknesses limited FLETC’s ability to ensure that critical 

financial and operational data was maintained in such a manner to ensure confidentiality, 

integrity, and availability. In addition, these weaknesses negatively impacted the internal controls 

over FLETC financial reporting and its operations.

Conditions: In FY 2006, the following IT and financial system control weaknesses were 

identified related to Momentum, PD and the supporting IT control environment: 

1. Regarding entity-wide security program planning and management, we noted: 
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Independent Auditors’ Report 

Exhibit II – Reportable Conditions 

x Background investigations of contractors employed to operate, manage and provide 

security over FLETC IT systems is not being properly conducted. 

x Information technology security awareness training is in draft form. 

2. Regarding access controls, we noted: 

x 5 instances of generic and shared accounts on key servers and databases. 

x Workstations, servers, or network devices were configured without necessary security 

patches, or were not configured in the most secure manner. 

x Password configurations for key systems were configured to permit passwords not in 

compliance with DHS password policies. 

x Physical access to the FLETC Telecom room was not adequately controlled. 

x Policies and procedures for access authorization and review were not developed. 

x Polices and procedures for restricting access to sensitive system software were not 

developed.

x Policies and procedures for mobile code and voice of internet protocol (VOIP) 

technology were not developed. 

x Polices and procedures for review of Momentum audit logs were not developed. 

3. Regarding application software development and change control, we noted: 

x The System Development Life Cycle for the Momentum system is in draft form. 

x Policies and procedures regarding configuration management controls were not in place. 

x The lack of documented test plan standards and procedures. 

x The lack of a documented comprehensive set of test transactions. 

x Test results are not maintained and a documented approval for the test results does not 

exist.

4. Regarding system software, we noted that the installation of the Momentum’s system 

software is not logged or reviewed by management. 

5. Regarding segregation of duties, we noted that policies and procedures for segregating 

incompatible duties in the Momentum’s system were not developed. 

6. Regarding service continuity, we noted: 

x Momentum’s back up tapes were not tested or appropriately labeled. 

x Momentum’s contingency plan has not been tested. 

Cause/Effect: Many of the conditions identified in FY 2006 during our IT audit are the result of a 

lack of detail and defined IT policies and procedures, as well as a lack of monitoring of the 

control environment to ensure compliance with DHS, OMB, and NIST policies. Additionally, 

many of these weaknesses are inherent in FLETC’s legacy systems, or system development 

activities that did not incorporate strong security controls from the outset and will take several 

years to fully address. Further, the lack of resources and competing responsibilities has prevented 

FLETC from implementing many of these controls and processes into their environment. And 

finally, there was no consistent and thorough testing of IT controls by FLETC to identify and 

mitigate weaknesses. The effect of the identified IT weaknesses has the potential to impact the 

integrity of the data processing and reporting of FLETC financial and operational data. 
70 Federal Law Enforcement Training Center

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Exhibit II – Reportable Conditions 

Criteria: The Federal Information Security Management Act (FISMA) passed as part of the 

Electronic Government Act of 2002 mandates that Federal entities maintain IT security programs 

in accordance with OMB and NIST guidance. OMB Circular A-130, Management of Federal 

Information Resources, and various NIST guidelines describe specific essential criteria for 

maintaining effective general IT controls. In addition, OMB Circular A-127 prescribes policies 

and standards for executive departments and agencies to follow in developing, operating, 

evaluating, and reporting on financial management systems. In addition, we assessed the FLETC 

financial systems to the Department’s own security policies and procedures, such as the DHS 

Information Technology Security Program Publication, 4300A. 

Recommendations: We recommend that FLETC management ensure that the following 

corrective actions are taken: 

1. For entity-wide security program planning and management: 

a) Enforce DHS policy to ensure that all contractors go through the appropriate 

background/suitability check; and 

b) Finalize the IT System Security Awareness and Training and enforce by having all new 

and existing FLETC users and contractors complete the training. 

2. For access control: 

a) Use unique database administrator (DBA) user accounts to allow for accountability when 

performing DBA duties on Procurement Desktop; 

b) Implement the corrective actions noted in the results of our IT audit’s vulnerability scans 

on the Momentum and PD applications; 

c) Perform periodic scans of the FLETC network environment, including the financial 

processing environment, for the identification of vulnerabilities, in accordance with NIST 

SP 800-42; 

d) Implement corrective actions to mitigate the risks associated with any vulnerabilities 

identified during periodic scans. Configure the Momentum and Procurement Desktop 

applications to require a password to be a minimum of eight characters in length and 

contain a combination of alphabetic, numeric, and special characters to be in compliance 

with DHS Information Technology Security Program Publication, 4300A Password 

Policy;

e) Configure the Procurement Desktop to lock out account users after three (3) invalid login 

attempts to be in compliance with DHS Information Technology Security Program 

Publication, 4300A; 

f) Develop policies and procedures regarding gaining access to the FLETC Telecom Room, 

including the use of a user authorization form; 

g) Perform a semi-annual review of the FLETC Telecom Room access listing in compliance 

with DHS Information Technology Security Program Publication 4300A; 
 2006 Performance Accountability Report 71

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Independent Auditors’ Report 

Exhibit II – Reportable Conditions 

h) Ensure that FLETC Manual 4330: User Identification and Authentication Management is 

finalized, promulgated to all FLETC employees and enforced; 

i) Develop and implement policies and procedures for restricting access to Momentum 

system software, and promulgate it to all needed personnel, to be in compliance with 

DHS Information Technology Security Program Publication, 4300A; 

j) Develop and implement FLETC specific policies and procedures over the authorization 

and use of mobile code and VOIP technologies to be in compliance with DHS 

Information Technology Security Program Publication 4300A; and 

k) Develop and implement policies and procedures to proactively monitor sensitive access, 

via audit log review, to system software utilities for Momentum to be in compliance with 

DHS Information Technology Security Program Publication, 4300A. 

3. For application software development and change control: 

a) Finalize and implement a SDLC methodology for Momentum, as well as incorporating 

security planning throughout the life cycle; 

b) Develop and implement documented policies and procedures over the Momentum and 

Procurement Desktop configuration management process modeled after the informal 

configuration management process currently in place; and 

c) Document a listing of all users with access to the Momentum and Procurement Desktop 

program libraries. Ensure that access is prohibited to development staff. 

4. For system software, enable audit logging over the installation of Momentum’s system 

software and ensure that logs are maintained and periodically reviewed by management. 

5. For segregation of duties: 

a) Identify and document incompatible duties and system roles and responsibilities within 

Momentum; and 

b) Develop and implement policies and procedures segregating incompatible duties within 

the core financial system to be in compliance with DHS Information Technology Security 

Program Publication, 4300A. 

6. For service continuity: 

a) Periodically test the backup compact discs maintained onsite in compliance with DHS 

Information Technology Security Program Publication 4300A; 

b) Affix external labels to the backup CDs indicating the distribution limitations and 

handling caveats of the information in compliance with DHS Information Technology 

Security Program Publication 4300A; and 

c) Perform a test of the Momentum’s contingency plan, in compliance with DHS 

Information Technology Security Program Publication 4300A. 
72 Federal Law Enforcement Training Center

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Exhibit II – Reportable Conditions 

Management’s Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings, and its comments 

were responsive to our recommendations. 
 2006 Performance Accountability Report 73

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Independent Auditors’ Report 

Exhibit III – Compliance with Laws and Regulations 

I. Federal Financial Management Improvement Act of 1996 (FFMIA) 

Background/Criteria: FFMIA requires that an agency’s financial management systems 

substantially comply with Federal financial management system requirements, applicable Federal 

accounting standards, and the U.S. Standard General Ledger at the transaction level. 

Conditions – Federal financial management system requirements: As explained in Exhibit II, 

FLETC has not complied with/performed: 

x The Computer Security Act Requirements in accordance with FISMA, and OMB Circular A130,

x The documentation requirements for financial management systems and processing 

instructions in accordance with JFMIP and other applicable requirements, 

x The internal control requirements that ensure resource use is consistent with laws, regulations, 

and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are 

obtained, maintained, and disclosed in reports, 

x The training and user support requirements that should be provided to the users at all levels of 

the financial systems to enable them to understand, operate, and maintain the systems, and 

x The maintenance required to enable the system to continue to operate in an effective and 

efficient manner. 

Conditions – Applicable Federal accounting standards: As explained in more detail in Exhibit 

II, we noted internal control weaknesses over six significant balance sheet line items that when 

viewed together represent a general inattention to reporting transactions in accordance with 

Federal Accounting Standards. Those six instances are presented in more detail in Exhibit II and 

consist of deficiencies in the following areas: 

1 Policies and procedures to ensure completeness, accuracy and valuation of FLETC’s 

estimated environmental liabilities; 

2 Policies and procedures to ensure the proper accounting and financial reporting of 

FLETC’s lease transactions; 

3 Valuation of operating materials inventories; 

4 Capitalization of construction in progress accounts; 

5 Lack of a methodology for approximating accounts payable at fiscal year-end; and 

6 Lack of a timely reconciliation of deferred revenue accounts. 

x In addition, Finance Division personnel generally focus on budgetary considerations, which 

although very important, must be accompanied by an appropriate recognition of FLETC’s 

financial reporting requirements and adherence to Federal Accounting Standards.

x The Finance Division does not always ensure that other divisions providing information or 

estimates necessary for financial reporting are properly trained on what information and 

support is required by GAAP. 

Conditions – Compliance with the U.S. Standard General Ledger at the transaction level: 

x FLETC is recording a liability in Momentum for received goods and services in general 

ledger account 2190, other accrued liabilities, rather than account 2110, accounts payable. 

x FLETC is not using the disbursements in transit, account 2120, when it processes an invoice 

for payment. FLETC delays recording the transaction until Treasury confirms that the 
74 Federal Law Enforcement Training Center

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Independent Auditors’ Report 

Exhibit III – Compliance with Laws and Regulations 

disbursement has been made, at which time accounts payable, account 1011, and fund balance 

with Treasury, account 1010, are reduced to reflect the disbursement. 

Recommendation: We recommend that FLETC implement the recommendations related to the 

above conditions as detailed in Exhibits I and II as well as develop a process to ensure FLETC 

complies with all the provisions of FFMIA. 

Management Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management agreed with our findings, and its comments 

were responsive to our recommendations. 

J. Prompt Payment Act 

Background/Criteria: In 1982, Congress enacted the Prompt Payment Act (P.L. 97-177) 

(referred to herein as ‘The Act’). The Act, as amended, is found at 31 U.S.C. Chapter 39. The 

Office of Management and Budget (OMB) included the Prompt Payment Act in OMB Circular 

A-125, which has since been rescinded and codified in Title 5 part 1315 of the Code of Federal 

Regulations on September 29, 1999. 

The Prompt Payment final rule by OMB (5 CFR 1315) requires Executive Departments and 

Agencies to pay commercial obligations within a certain time period and to pay interest on 

payments that are late. 

The Prompt Payment standards published in the Federal Register Volume 64, No. 188 section 

1315.4, paragraph 4(i), state that “when payments are made after the due date, interest will be 

paid automatically...” Paragraph (j) further states that payments are to follow good stewardship 

and cash management practices, and that entities are to make payment “no more than seven days 

prior to the payment due date.” 

In determining when a payment is due, 5 CFR §1315.4(b)(1) states that “for the purposes of 

determining a payment due date and the date on which interest will begin to accrue if a payment 

is late, an invoice shall be deemed to be received on the later of: the date a proper invoice is 

actually received by the designated agency office... or the 7th day after the date on which the 

property is actually delivered.” The term “designated agency office,” is defined by 5 CFR 

§1315.2(m) to mean “the office designated by the purchase order, agreement, or contract to first 

receive and review invoices.” 

Furthermore, 31 U.S.C. 3902(b) states, “the interest penalty shall be paid for the period beginning 

on the day after the required payment date and ending on the date on which payment is made.” 

According to 5 CFR 1315, simple interest is to be computed at the interest rate established by the 

Secretary of the Treasury, and published in the Federal Register which is in effect at the time the 

agency accrues the obligation to pay a late interest payment. 

Conditions:

x FLETC is not calculating and paying interest on all past due invoices. A total of three of 32 

sample items selected for testing were paid more than 30 days after the invoice receipt date. 

Two of the sample items were subject to interest in excess of the $1 de-minimus threshold 
 2006 Performance Accountability Report 75

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Independent Auditors’ Report 

Exhibit III – Compliance with Laws and Regulations 

established under the Prompt Payment Act. However, FLETC did not pay interest on these 

items. 

x FLETC is not consistently annotating invoices with the date and time of receipt by the 

designated agency office. The date the invoice is received by the designated office is the log 

date entered into Momentum when the invoice is processed for payment. The Procurement 

Division does not consistently name the Finance Division as the designated agency office 

when issuing contracts, purchase orders, or modifications, and Accounting Technicians are 

not consistently verifying that the designated agency office annotated the invoice with the 

date and time of receipt. As a result, Accounting Technicians are relying on the date and time 

annotated by the Finance Division to indicate the date of initial receipt for use in determining 

the payment date and date on which interest begins to accrue. 

x Accounting Technicians are not consistently entering the log date correctly when creating 

payment vouchers in Momentum Financials Desktop. KPMG noted one instance where an 

invoice was received and not annotated with a log date. The invoice was subsequently 

forwarded to the Contracting Officers Representative (COR) for certification. When the COR 

returned the invoice to the Finance Division, an acceptance date and time was annotated on 

the document. As a result, the incorrect log date was used when entering information into 

Momentum Financials Desktop. 

x There were two instances where an invoice was received from a vendor and annotated with a 

log date. The invoices were subsequently forwarded to the COTR for certification. When the 

COTR returned the invoice to the Finance Division, a second acceptance date and time was 

annotated on the invoices. When creating the payment voucher in Momentum, the 

Accounting Technician used the latter of the two dates. 

x Accounting Technicians are not consistently entering the acceptance date correctly when 

creating payment vouchers in Momentum Financials Desktop. KPMG noted two instances 

where the acceptance date entered in Momentum corresponded to the date the invoice was 

certified for payment, not the date the COTR indicated the goods were accepted. 

Recommendations: We recommend that FLETC management: 

x Develop and implement a training requirement for all personnel processing invoices and 

payments to ensure FLETC’s compliance with 5 CFR 1315, the Prompt Payment Act. 

x Develop and implement a quarterly review process to examine the documentation supporting 

payments for proper recording of receipt dates, ensure that dates and payment information are 

correctly entered into Momentum Financials Desktop, and ensure disbursements are 

scheduled in accordance with the requirements of the Prompt Payment Act.

Management Response: Management has prepared an official response presented as a separate 

attachment to this report. In summary, management disagreed with the significance of our 

findings because it believes that that the size of the audit sample of transactions was relatively 

small to conclusively determine that FLETC is noncompliant with the requirements of the Prompt 

Payment Act, the Act. 

In addition, Management disagrees with the significance of our finding based on the total interest 

penalty payments made by FLETC when compared to total FLETC disbursements. Specifically 

Management believes that if total interest penalty payments are within the 2% interest threshold 

established by the DHS Office of Financial Management, they should be considered in 

compliance with the Act. 
76 Federal Law Enforcement Training Center

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Exhibit III – Compliance with Laws and Regulations 

Auditors’ Response to Management’s Response As described above, we tested the attributes of 

internal controls that help to ensure compliance with the Act. Attribute testing and sample size is 

addressed in the Government Accountability Office Financial Auditing Manual,GAO FAM,

Section 460.02. Our sample size was appropriately determined by that guidance. 

Our testing of compliance with the Act was based on guidance provided by the GAO FAM that 

does not base compliance with the Act on an internally generated threshold. 

Therefore we continue to believe that the findings as stated above constitute noncompliance with 

the Act. 
 2006 Performance Accountability Report 77

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Independent Auditors’ Report 

Exhibit IV – Status of Prior Year’s Reportable Condition 

Prior Year 

Condition

As Reported at 

September 30, 2005 

(DHS Consolidated 

Report)

Status as of September 30, 2006 

(FLETC Stand-Alone Balance Sheet Only Report) 

Capital

Leases

Material Weakness: 

FLETC had not properly 

classified as capital 

leases three build–to–

lease dormitories. 

Continues as a Material Weakness: FLETC

reclassified the improperly recorded contingent lease 

liability to the appropriate capital lease liability account 

and corrected the accompanying misstatements of 

imputed interest, accumulated depreciation, 

depreciation, lease liability outstanding, and 

cumulative results of operations. This finding is 

reported as a material weakness in Exhibit I of this 

report.
78 Federal Law Enforcement Training Center

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80 Federal Law Enforcement Training Center

Financial Information

ASSETS 

Intragovernmental assets

Fund balance with Treasury (Note 3) $ 202,290

Accounts receivable, net (Note 5) 14,838

Other (Note 6) 397

Total intragovernmental assets 217,525

Cash (Note 4) 27

Accounts receivable, net (Note 5) 1,280

Property, plant and equipment, net (Note 7) 409,955

TOTAL ASSETS $ 628,787

LIABILITIES 

Intragovernmental Liabilities

Other (Note 10) $ 2,995

Total Intragovernmental Liabilities 2,995

Accounts Payable 2,982

Deferred Revenue 215

Accrued Payroll and Benefits 23,606

Environmental Clean-Up Liability (Note 9) 11,197

Capital Lease Liability (Note 11) 61,153

Other (Note 10) 14,753

TOTAL LIABILITIES $ 116,901

NET POSITION 

Unexpended Appropriations $ 197,114

Cumulative Results of Operations 314,772

TOTAL NET POSITION $ 511,886

TOTAL LIABILITIES AND NET POSITION $ 628,787

Department of Homeland Security

(In Thousands)

The accompanying notes are an integral part of this statement.

FEDERAL LAW ENFORCEMENT TRAINING CENTER

CONSOLIDATED BALANCE SHEET

As of September 30, 2006

Consolidated Balance Sheet
 2006 Performance Accountability Report 81

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A. REPORTING ENTITY

The Federal Law Enforcement Training Center 

(FLETC), a component of the U.S. Department of 

Homeland Security (DHS), serves as an interagency 

law enforcement training center. The FLETC 

provides facilities, equipment, and support services 

for conducting law enforcement training for 

Federal agencies and specialized programs for State 

and local agencies and foreign governments. The 

FLETC was established on July 1, 1970, by Treasury 

Department Order No. 217, as an organizational 

entity within the Department of the Treasury. The 

FLETC was transferred from Treasury to the DHS on 

March 1, 2003, as an entity within the Directorate 

of Border and Transportation Security by the 

Homeland Security Act of 2002 (P.L. 107-296). 

Training sites and offices include Glynco, Georgia; 

Artesia, New Mexico; Washington, DC; Charleston, 

South Carolina; and Cheltenham, Maryland. Also, 

the FLETC conducts training in four International 

Law Enforcement Academies (ILEA) located in 

Budapest, Hungary; Bangkok, Thailand; Gaborone, 

Botswana; and San Salvador, El Salvador. The 

programs and operations of the FLETC are funded 

principally through Congressional appropriations 

on an annual, multi-year, and no-year basis. 

Accordingly, operating costs incurred and recorded 

as expenses are funded through either appropriated 

funds, reimbursable agreements or other financing 

sources.

B. BASIS OF ACCOUNTING

AND PRESENTATION

The financial information presented is a 

consolidated balance sheet only, as of September 

30, 2006. The consolidated balance sheet has 

been prepared from the accounting records of the 

FLETC in conformity with U.S. generally accepted 

accounting principles (GAAP), based on accounting 

standards issued by the Federal Accounting 

Standards Advisory Board, and with the Office of 

Management and Budget (OMB) Circular A-136, 

Financial Reporting Requirements. Under GAAP, 

as a general rule, revenues and related assets are 

recognized when earned, and expenses and related 

liabilities are recognized when incurred.

The consolidated balance sheet should be read 

with the realization that it is for a component of 

a sovereign entity, that liabilities not covered by 

budgetary resources cannot be liquidated without 

the enactment of an appropriation and that 

payment of liabilities other than for contracts can be 

abrogated by the sovereign entity. 

C. ASSETS AND LIABILITIES

Entity intra-governmental assets and liabilities 

result from activity with other Federal agencies. All 

other entity assets and liabilities result from activity 

with parties outside the Federal government, such 

as domestic and foreign persons, organizations, 

or governments outside the U.S. Government. 

Assets represent tangible items that have probable 

economic benefits that can be obtained or 

controlled by the FLETC. Liabilities represent 

the amount of monies or other resources that 

are likely to be paid as a result of a transaction 

or event that has already occurred. However, no 

liability can be paid absent an appropriation. 

Liabilities for which an appropriation has not been 

enacted are, therefore, classified as Liabilities not 

covered by Budgetary Resources. Although future 

appropriations to fund the liabilities are likely and 

anticipated, it is not certain that appropriations will 

Notes to the Consolidated Balance Sheet

Note 1: Summary of Significant Accounting Policies
82 Federal Law Enforcement Training Center

Financial Information

be enacted to fund these liabilities. Also, liabilities 

arising from other than contracts can be abrogated 

by the Government, acting in its sovereign capacity.

D. FUND BALANCES WITH TREASURY

Fund balances with Treasury represent funds 

available to pay liabilities and finance authorized 

expenditures. 

E. ACCOUNTS RECEIVABLE AND

RELATED ALLOWANCES FOR 

UNCOLLECTIBLE AMOUNTS

Outstanding billed reimbursable costs for goods 

and services provided to other Federal agencies 

and state and local governments comprise the 

majority of accounts receivable. The FLETC uses 

the allowance method for recognizing bad debt 

expense on state and local government accounts 

receivable. No allowance is recorded for accounts 

receivable from Federal agencies as these amounts 

are considered fully collectible.

F. OTHER INTRAGOVERNMENTAL ASSETS

Other intragovernmental assets consist of prior 

fiscal years governmental advances to the legacy 

Department of the Treasury Working Capital Fund 

(WCF) for expenses of operating and maintaining 

common administrative services of Treasury 

provided to the FLETC prior to its transfer to DHS. 

In accordance with the established Treasury WCF 

procedures, funds for services were collected in 

advance and expended as services were provided 

by the WCF. The FLETC expects the WCF to refund 

these advances. 

G. OPERATING MATERIALS AND SUPPLIES

Operating materials and supplies (OM&S) are 

tangible personal property consumed in normal 

operations. In FY 2006, the FLETC implemented a 

change in accounting principle for the accounting 

of its OM&S. Prior to FY 2006, a financial resource 

was recognized when title passed to the FLETC, or 

goods were in the FLETC’s possession. At the time 

the goods were used in the provision of a service, 

the asset was removed from the account. In FY 

2006, the FLETC began applying the purchase 

method which provides that OM&S be expensed 

when purchased. The purchase method was 

adopted because it is not cost-beneficial to apply 

the consumption method, an allowable exception to 

using the consumption method. The effect of the 

adoption was a decrease of $8 million to the OM&S 

asset account and to the beginning cumulative 

results of operations (CRO) balance. 

H. PROPERTY, PLANT, AND EQUIPMENT

The FLETC capitalizes property, plant, and 

equipment (PP&E) with an acquisition value 

of $50,000 or greater. Major alterations and 

renovations are also capitalized, while minor 

equipment costs are charged to expenses as 

incurred. Property and equipment transferred to 

the FLETC from the Department of Defense on 

the date that the FLETC relocated to Glynco, as 

well as the turnover of Cheltenham, Maryland and 

Charleston, South Carolina facilities are recorded at 

the net book value at the date they were transferred 

to the FLETC. There are no restrictions on the use 

or convertibility of general PP&E.

Depreciation is calculated on a straight-line basis 

over estimated useful lives ranging from five 

to thirty years, once the asset has been placed 

in service. Land is not depreciated. Buildings 

acquired under capital leases are amortized over the 

lease term. Routine repairs and maintenance are 

expensed as incurred.

The FLETC also capitalizes its internal use 

software. Internal use software includes purchased 

commercial off-the-shelf software (COTS), 

internally developed, or contractor-developed. For 
 2006 Performance Accountability Report 83

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COTS, the FLETC capitalizes the amount paid to the 

vendor for the software. For contractor developed 

software, the capitalized costs include the amount 

paid to a contractor to design, program, install 

and implement the software. Capitalized costs for 

internally developed software include the full costs 

(direct and indirect costs) incurred during the 

software development phase. Amortization of the 

capitalized software is calculated using the straightline method beginning on the date of acquisition, 

if purchased, or the when successfully tested and 

placed in use, if developed.

I. ACCRUED PAYROLL AND

OTHER BENEFITS

Accrued payroll and other benefits include annual 

leave, compensatory time, and other leave time. The 

accrual for these items represents the leave time 

earned by the FLETC employees but not taken as of 

the fiscal year end, and is computed using current 

compensation rates. Sick leave is not accrued when 

earned, but is expensed when taken as employees 

do not get paid for unused sick time upon 

separation from the organization.

J. PENSION COSTS AND OTHER

RETIREMENT BENEFITS

The FLETC recognizes the full annual cost of its 

civilian employees’ pension benefits; however, the 

assets of the plan and liability associated with these 

costs are recognized by the Office of Personnel 

Management (OPM) rather than the FLETC.

In general, employees hired prior to January 1, 

1984, participate in the Civil Service Retirement 

System (CSRS), while employees hired after 

that date participate in the Federal Employees’ 

Retirement System (FERS). The FLETC and its 

employees contribute to the retirement plan at a 

certain percent of base pay as provided by the OPM. 

The cost of providing these benefits by OPM is 

more than the amount contributed by the FLETC 

and its employees. The difference between the full 

annual cost of CSRS and FERS retirement plans and 

the amount paid by the FLETC is recorded as an 

imputed cost on the FLETC’s Statement of Net Costs, 

and also as an offsetting imputed financing source 

in the FLETC’s Statement of Net Position.

Similar to the retirement plans, the OPM, not the 

FLETC, reports the liability for future payments to 

retired employees who participate in the Federal 

Employees Health Benefits Program (FEHB) and the 

Federal Employees Group Life Insurance Program 

(FEGLI). The full cost of these benefits, however, is 

recorded in the FLETC’s financial statements with an 

offsetting imputed financing source.

K. FEDERAL EMPLOYEE BENEFITS PAYABLE

– FECA ACTUARIAL LIABILITY

The Federal Employees Compensation Act (FECA) 

program is administered by the U.S. Department of 

Labor (DOL) and provides income and medical cost 

protection to covered Federal civilian employees 

who have been injured on the job or have incurred 

a work-related occupational disease. Beneficiaries 

of employees whose death is attributable to a 

job-related injury or occupational disease receive 

compensation. The DOL initially pays valid FECA 

claims for all of the Federal government and 

seeks reimbursement two fiscal years later from 

the Federal agencies employing the claimants. 

Estimated future FECA costs are determined by the 

DOL for the DHS, which in turn, allocates to the 

FLETC actuarial liabilities not covered by budgetary 

resources. This governmental liability is determined 

by using the paid losses extrapolation method 

calculated over the next 37-year period. This 

method utilizes historical benefit payment patterns 

related to a specific incurred period to predict the 

ultimate payments related to that period.
84 Federal Law Enforcement Training Center

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L. LITIGATION CONTINGENCIES

AND SETTLEMENTS

Probable and estimable unsettled litigation and 

claims against the FLETC are recognized as a liability 

and expensed for the full amount of the expected 

loss. Expected litigation and claim losses include 

settlements to be paid from the Treasury Judgment 

Fund on behalf of the FLETC and settlements to be 

paid from the FLETC appropriations. Settlements to 

be paid from the Judgment Fund for the FLETC are 

recognized as an expense and imputed financing.

M. ENVIRONMENTAL LIABILITY

Cleanup costs, which are the costs of removing, 

containing and/or disposing of hazardous waste, 

represent an environmental liability. At September 

30, 2006, the FLETC has recorded an accrual for 

the estimated total cleanup costs associated with its 

firearms ranges. Based on new accounting guidance 

to be adopted in FY 2007, future liability estimates 

will include cleanup costs of buildings containing 

friable and non-friable asbestos. Cost estimates 

are subject to revision as a result of changes in 

technology, environmental laws and regulations, 

inflation and plans for remediation. Any changes in 

the estimated total cleanup costs will be expensed 

when re-estimates occur and the liability balance is 

adjusted. 

N. EARMARKED FUNDS AND ADOPTION OF

A NEW ACCOUNTING STANDARD

The FLETC has adopted SFFAS No. 27. Identifying 

and Reporting Earmarked Funds. Earmarked funds 

are financed by specifically identified revenues and 

are required by statute to be used for designated 

activities or purposes. 

Earmarked non-exchange revenue and other 

financing sources, including appropriations and 

net cost of operations, are shown separately on the 

Statement of Changes in Net Position. The portion 

of cumulative results of operations attributable to 

earmarked funds is shown separately

on both the Statements of Changes in Net Position 

and the Balance Sheets. The FLETC has only one 

earmarked fund of less than $500 in FY 2006. 

Due to the immaterial balance, it is not separately 

reported as of September 30, 2006.

O. REVENUES AND FINANCING SOURCES

The FLETC receives the majority of its funding 

through annual, multi-year, no-year, and trust fund 

appropriations that may be used within statutory 

limits for operating and capital expenditures. 

Appropriations are recognized as financing sources 

when the related expenses are incurred. The 

FLETC enters into reimbursable agreements with 

the Department of Homeland Security and other 

Federal entities for services or goods provided. 

Under these arrangements, one entity provides 

goods or services to another at an agreed-upon 

price, and revenue from reimbursable agreements is 

recognized when the services are provided. Other 

minor financing sources include gifts and transfers 

from the Department of Justice’s Violent Crime 

Reduction Trust Fund.

P. IMPUTED COSTS/FINANCING SOURCES

The FLETC often receives goods and services 

from other Federal Government entities without 

reimbursing the providing entity for all related 

goods. These are subsidized costs that are 

recognized as imputed costs by the FLETC. 

Conversely, the FLETC often incurs costs that are 

partially or totally paid for by other entities. These 

are recorded as imputed financing sources. The 

FLETC recognizes both imputed costs and financing 

sources to the extent directed by the OMB and DHS. 

The FLETC started recording intra-departmental 

imputed costs for law enforcement instructors 

detailed from the other DHS bureaus in Fiscal Year 

(FY) 2005.
 2006 Performance Accountability Report 85

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Q. TAX STATUS

The FLETC is a Federal entity, and therefore is 

not subject to Federal, state or local income 

taxes. Accordingly, no liability for income taxes is 

required in the accompanying balance sheet.

R. USE OF ESTIMATES

The preparation of the financial statements requires 

management to make estimates and assumptions 

that affect the reported amounts of assets and 

liabilities, disclosures of contingencies at the date of 

the financial statements and the reported amounts 

of revenues and expenses during the period. 

Actual results could differ from these estimates. 

Useful lives of fixed assets, allowance for doubtful 

accounts related to accounts receivable, likelihood 

of outcomes related to contingent liabilities and 

the actuarial estimates associated with the FECA 

liabilities are estimates that have the most significant 

impact on the accompanying balance sheet.

Note 2: Non-Entity Assets

There are no non-entity assets as of September 30, 2006. All assets are entity assets of the FLETC.
86 Federal Law Enforcement Training Center

Financial Information

Note 3: Fund Balance with Treasury

A. Fund Balances as of September 30, 2006 (in thousands):

Fund Type

Trust Funds $ -

Appropriated Funds 201,838

Other Fund Types 452

Total $ 202,290

Trust fund balances are comprised of gifts and transfers from the Department of Justice’s Violent Crime 

Reduction Trust Fund. At September 30, 2006 trust fund balances are nominal. Other fund balances result 

from the FLETC’s authority to use the proceeds from the sale of surplus items and recyclable materials to 

purchase like-items. If these funds are not used for this restricted purpose within two years, the FLETC is 

required to transfer the funds to the Department of Treasury.

B. Status of Fund Balance with Treasury as of September 30, 2006 (in thousands):

Status

Unobligated balance

Available $ 73,193

Unavailable 16,662

Obligated balance not yet disbursed 111,983

Restricted unobligated balance - Deposit funds 452

Total $ 202,290

Note 4: Cash

The cash amount totaling $27 thousand as of September 30, 2006 represents collections on hand, not yet 

deposited.

Note 5: Accounts Receivable, Net

A. Intragovernmental Accounts Receivable

Intragovernmental accounts receivable due from other Federal agencies as of September 30, 2006, total 

$14.8 million, and are considered fully collectible.

B. Public Accounts Receivable
 2006 Performance Accountability Report 87

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Receivables due from the public are recognized for law enforcement training provided to state, local and 

foreign governments. As of September 30, 2006, receivables from the public total $1.3 million, net of 

an allowance for doubtful accounts totaling $45 thousand. The allowance for estimated uncollectible 

accounts receivable due from the public is determined by using the Percentage Analysis Method. The 

Percentage Analysis Method derives an estimated percentage of uncollectible accounts receivable by 

account type that is based on the experience of collecting past due accounts. The Specific Identification 

Method is used when actual uncollectible amounts of receivables are known.

Note 6: Other Assets

Other intragovernmental assets are comprised of $0.4 million as of September 30, 2006 for advances paid 

to the legacy Department of the Treasury Working Capital Fund. The balances are expected to be refunded 

from the Treasury. 

Note 7: General Property, Plant, and Equipment, Net

Property, plant, and equipment (PP&E) consists of the following as of September 30, 2006 (in 

thousands):

Service Acquisition Accumulated

Life Cost Depreciation/Amortization Net Book Value

Category (Years) 2006 2006 2006

Land and Land Rights N/A $ 4,077 $ - $ 4,077

Construction in Progress N/A 48,059 - 48,059

Buildings, Structures,

and Facilities 20-30 404,112 107,850 296,262

Equipment:

ADP 5 257 257 0

Vehicles 5-8 5,979 3,517 2,462

Other Equipment 5 3,767 3,223 544

Assets Under Capital 

Lease 20 68,164 11,937 56,227

Internally Developed Software N/A 2,324 - 2,324

Total Property, Plant 

and Equipment $ 536,739 $ 126,784 $ 409,955

Note 8: Liabilities Not Covered By Budgetary Resources

Property, plant, and equipment (PP&E) consists of the following as of September 30, 2006 

(in thousands):
88 Federal Law Enforcement Training Center

Financial Information

Intragovernmental:

Unfunded FECA liability $ 2,991

Total Intragovernmental Not Covered 2,991

Public:

Accrued payroll and benefits 18,552

Accrued cleanup cost liability 11,197

Capital lease liability 61,153

Contingent liabilities 350

Total Public Not Covered 91,252

Total Liabilities Not Covered by Budgetary Resources 94,243 $

Total Liabilities Covered by Budgetary Resources 22,658 $

Total Liabilities $ 116,901

The FLETC anticipates that the liabilities not covered by budgetary resources will be funded from future 

budgetary resources when required.

Note 9: Environmental Clean-Up Liability

The FLETC is responsible to clean up its sites with environmental contamination based on compliance with 

Federal, state and/or local environmental laws and regulations. The primary Federal laws associated with 

environmental clean up are the Comprehensive Environmental Response, Compensation, and Liability Act 

and the Resource Conservation and Recovery Act.

The FLETC has recorded $11.2 million for environmental cleanup cost liability as of September 30, 2006. 

The amount represents the total estimated cleanup costs for thirty-four firing ranges (19 in Artesia, NM; 

6 in Charleston, SC; 1 in Cheltenham, MD and 8 in Glynco, GA). Currently, there are no plans to close 

or clean up the ranges; however, the estimated costs of future cleanup represent a liability for financial 

reporting purposes. Included in the September 2006 amount is a $7 thousand balance from actual 

cleanup of four Glynco outdoor firearms ranges completed in FY 2005. The FLETC is waiting for State 

of Georgia environmental regulators to approve the completed cleanup of the four ranges and formally 

close the project. The requirements for the Glynco firearms ranges are governed by the State of Georgia 

Hazardous Waste Management Act (O.C.G.A. Section 12.8.60).

In addition to the contamination associated with the firearms ranges, the FLETC is responsible to clean 

up its buildings that contain asbestos and/or lead-based paints, in accordance with applicable laws. As 

of September 30, 2006, no buildings contained friable asbestos and there were no plans to dispose of or 

clean up any buildings. Therefore, no liability was recorded for financial reporting purposes. Next year, 

however, the FLETC will adopt new accounting guidance that will require the recording of a liability for 
 2006 Performance Accountability Report 89

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both friable and non-friable asbestos cleanup costs that are both probable and reasonably estimable. The 

FLETC will perform an environmental study in FY 2007 to determine cost estimates. 

The estimated costs recognized as of September 30, 2006 are based on the most current information 

on prior experience as well as environmental studies, but will be monitored on an ongoing basis. Cost 

estimates are subject to revision as a result of changes in technology, environmental laws and regulations, 

inflation and plans for remediation. Any changes in the estimated total cleanup costs will be expensed 

when re-estimates occur and the liability balance adjusted. 

Note 10: Other Liabilities

Other liabilities are as follows as of September 30, 2006 (in thousands):

Non-Current Current Total

Intragovernmental:

Unfunded FECA liability $ 2,991 -$ $ 2,991

Employee benefits contributions and payroll taxes - 4 4

Total Other Intragovernmental 2,991 2,995 4 

Public:

Capital lease liability 58,895 2,258 61,153

Contingent liabilities 350 350

Accrued cleanup cost liability 11,197 11,197 - 

Other accrued liabilities 14,403 - 14,403

Total Other Nongovernmental Liabilities $ 70,442 $ 16,661 $ 87,103

2006

Other accrued liabilities represent primarily accruals for goods and services received, but unbilled at yearend.

Contingent Liabilities: 

The FLETC is involved in various administrative proceedings incidental to its operations. The estimated 

contingent liability recorded at September 30, 2006 is $350 thousand. Other claims for which loss probability is reasonably possible is estimated as $200 thousand. Management vigorously contests all claims 

and lawsuits. 
90 Federal Law Enforcement Training Center

Financial Information

Note 11: Leases

A. FLETC as a Lessee

Capital Leases:

In FY 2001 and FY 2002, the FLETC entered into 20-year leases for the construction and operation of 

three private, hotel-type facilities to meet an urgent need for additional law enforcement student housing. 

At September 30, 2006, the FLETC has recorded the remaining net present value of the net lease payments 

for the three facilities as a capital lease liability. The minimum lease payments are being allocated between 

the reduction of the capital lease liability and interest expense. The unamortized capital lease liability is 

$61.2 million. 

Summary of Assets Under a Capital Lease (in thousands):

2006

Land and Buildings $68,164

Accumulated Amortization (11,938)

Net Assets Under a Capital Lease $56,226

Future Payments Due:

Fiscal Year Building

2007 $ 6,103

2008 6,103

2009 6,103

2010 6,103

2011 6,103

Beyond 2011 69,903

Total Future Lease Payments $ 100,418

Less: Imputed Interest (34,972)

Less: Executory Costs (4,293)

Net Capital Lease Liability $ 61,153

Lease liabilities covered by budgetary resources $ -

Lease liabilities not covered by budgetary resources $61,153
 2006 Performance Accountability Report 91

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Operating Leases:

The FLETC leases various properties that are accounted for as operating leases, including an office space 

in Washington, DC that is leased from the General Services Administration (GSA). The GSA-leased equipment consists of various vehicles used for training. The non-GSA leases consist of office equipment such as 

copiers and postage meters. Lease arrangements are normal business practices by the GSA and commercial 

vendors as stipulated in the applicable GSA Federal supply schedule contracts. The future lease payments 

under the current non-cancellable leases are as follows (in thousands):

Future Payments Due:

Non-GSA

GSA-Leased GSA-Leased Leased

Fiscal Year Building Equipment Equipment Totals

2007 $ 233 $ 1,037 $ 549 $ 1,819

2008 234 1,037 518 1,789

2009 234 1,037 23 1,294

2010 234 1,037 18 1,289

2011 234 1,037 - 1,271

Beyond 2011 1,168 5,185 - 6,353

Total Future Lease Payments $ 2,337 $ 10,370 $ 1,108 $ 13,815

Asset Category
92 Federal Law Enforcement Training Center

Financial Information

Communication

Fiscal Year Tower

2007 $ 10

2008 11

2009 11

2010 11

2011 11

Beyond 2011 44

Total Future Lease Payments $ 98

B. FLETC as a Lessor

The FLETC purchased a 20-acre parcel of real property in Brunswick, Georgia, in FY 2003, that has an irrevocable 50-year lease for a communications tower by SBA Properties, Inc. The lease is for an initial term of 

five years and renews up to ten additional terms of five years each, unless the lessee notifies the FLETC of 

its intent of non-renewal. The lease receipt for the first five years is $800 monthly or $9,600 annually and 

increases by 15% with the sixth year and every fifth year thereafter. The lease receipts are miscellaneous 

revenues in the FLETC Custodial Account and deposited to the Treasury General Fund (in thousands):

Future Projected Receipts:
 2006 Performance Accountability Report 93

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Required Supplementary Information (Unaudited)

DEFERRED MAINTENANCE

The FLETC performs maintenance on its facilities. Maintenance includes preventive maintenance, normal 

repairs, replacement of parts and structural components, and other activities needed to preserve the asset 

so that it continues to provide acceptable services and achieves its expected life.

Deferred maintenance is maintenance that was not performed when it should have been or was scheduled 

to be and which, therefore, is put off or delayed for a future period. The chart below presents information 

on the FLETC’s deferred maintenance. The information is measured by condition assessment survey, which 

includes periodic inspections of PP&E.

Asset Category Good Fair Poor Low High

Buildings, Structures, and Facilities x x - $40,747 $45,036

Equipment - Vehicles and Vessels x x - $0 $0

Equipment - Other x x - $0 $0

Stewardship/Heritage Assets $0 $0

Total $40,747 $45,036

 /1. Asset Condition 

Good. Facility/equipment condition meets established maintenance standards, operates efficiently, and has a normal life

 expectancy. Scheduled maintenance should be sufficient to maintain the current condition, and there is no deferred

 maintenance on assets in good condition.

Fair. Facility/equipment condition meets minimum maintenance standards, but requires additional maintenance or repair to

 prevent further deterioration, increase operating efficiency, and to achieve normal life expectancy. 

 Deferred maintenance may need to be recognized.

Poor. Facility/equipment does not meet most maintenance standards and requires frequent repairs to prevent accelerated

 deterioration and provide a minimal level of operating function. In some cases, this includes condemned or failed facilities.

(Dollars in thousands)

(check all applicable box with "x") Estimated Range

Asset Condition /1. Deferred Maintenance
94 Federal Law Enforcement Training Center

keeping the skies friendly | The FLETC provides realistic 

scenario-based training environments for three branches 

of government, 31 federal departments and independent 

agencies and 82 partner organizations. Here U.S. Air 

Marshals use aircraft at FLETC Artesia to train students in 

the tactics and techinques to counter airborne threats.
Performance & Accountability Report

Fiscal Year 2006

The Federal Law Enforcement Training Center

glynco | Artesia | charleston | cheltenham | ilea botswana | ILEA san salvador

Part IV Other Supplementary Information
96 Federal Law Enforcement Training Center

Other Supplemental Information

FLETC Partner Organizations

3 Branches of Government

31 Member Departments and Independent Agencies

82 Partner Organizations

EXECUTIVE BRANCH:

Agency for International Development Office of the Inspector General

Agriculture U.S. Forest Service

Office of the Inspector General

 

Central Intelligence Agency Office of the Inspector General

Office of Security

Commerce Bureau of Industry and Security

 National Institute of Standards and Technology

National Marine Fisheries Service

Office of the Inspector General

Office of Security

Defense Air Force Office of Special Investigations

 Defense Criminal Investigative Service

Defense Logistics Agency

National Security Agency

Naval Criminal Investigative Service

Office of the Inspector General

Pentagon Force Protection Agency

Education Office of the Inspector General

Energy Office of the Inspector General

Environmental Protection Agency Criminal Investigations Division

Office of the Inspector General

Federal Deposit Insurance Corporation Office of the Inspector General

General Services Administration Office of the Inspector General

Health and Human Services Food and Drug Administration

 National Institutes of Health

Office of the Inspector General

Homeland Security Citizenship and Inspection Services

Customs and Border Protection

Federal Air Marshals

Federal Emergency Management Agency Office of the Inspector General

Federal Emergency Management Agency Office of Safety and Security

 Federal Protective Service

Immigration and Customs Enforcement

Office of the Inspector General

Transportation Security Administration

U.S. Border Patrol

U.S. Coast Guard

U.S. Secret Service

Housing and Urban Development Office of the Inspector General

Interior Bureau of Indian Affairs

Bureau of Land Management

Bureau of Reclamation

 Fish and Wildlife Service

National Park Service

Office of the Inspector General

Office of Surface Mining, Reclamation and Enforcement

U.S. Park Police
 2006 Performance Accountability Report 97

fletc

Justice Bureau of Alcohol, Tobacco and Firearms

Federal Bureau of Prisons

Federal Bureau of Investigations Police

Office of the Inspector General

U.S. Marshals Service

Labor Office of the Inspector General

National Aeronautics and Space Administration Office of the Inspector General

National Railroad Passenger Corporation Amtrak Police

Nuclear Regulatory Commission Office of the Inspector General

Office of Personnel Management Office of the Inspector General

Railroad Retirement Board Office of the Inspector General

Small Business Administration Office of the Inspector General

Smithsonian Institute National Zoological Park

Office of Protection Services

Social Security Administration Office of the Inspector General

State Bureau of Diplomatic Security

Office of the Inspector General

Tennessee Valley Authority Office of the Inspector General

 TVA Police

Transportation Office of the Inspector General

Treasury Bureau of Engraving and Printing

Financial Crimes Enforcement Network

 Internal Revenue Service Criminal Investigations Division

Office of the Inspector General

 Treasury Inspector General for Tax Administration

U.S. Mint

U.S. Postal Service Office of the Inspector General

 Postal Inspection Service-Postal Police

Veterans Affairs Office of the Inspector General

JUDICIAL BRANCH:

U.S Courts Office of Probation and Pretrial Services

 Supreme Court Police

LEGISLATIVE BRANCH:

U.S. Congress Library of Congress Police

Office of the Inspector General

Office of Security

 U.S. Capitol Police 
98 Federal Law Enforcement Training Center 

Principal Officials of the FLETC

 Director .................................................................................................................................. Connie L. Patrick

 

 Chief of Staff ..................................................................................................................... Jane C. Titus 

 

 Chief Counsel ................................................................................................................... Willis C. Hunter

 Public Affairs Officer ......................................................................................................... Peggy D. Dixon

 Senior Associate Director, Washington Operations ................................................................. John C. Dooher 

 

 Assistant Director - Chief Financial Officer ........................................................................ Alan L. Titus

 Deputy Director ..................................................................................................................... D. Kenneth Keene

 Assistant Director, Training .................................................................................................. Bruce J. Bowen

 Deputy Assistant Director, Training Operations .............................................................. Bradley W. Smith

 Deputy Assistant Director, Training Applications ............................................................ Marie R. Bauer

 Assistant Director, Training Innovation and Management ..................................................... Michael R. Hanneld

 Deputy Assistant Director, Training Management ........................................................... Robert Ray

 Deputy Assistant Director, Training Support ................................................................... Robert S. Gray 

 Assistant Director, Field Training .......................................................................................... Cynthia J. Atwood

 Deputy Assistant Director, Artesia Operations ............................................................... Joseph W. Wright

 Deputy Assistant Director, State and Local Law Enforcement Training ........................... Stanley Moran

 

 Deputy Assistant Director, Charleston Operations ......................................................... Eugene L. Coon

 Deputy Assistant Director, Cheltenham Operations ....................................................... Robert A. Smith

 

 Assistant Director, Administration ......................................................................................... Marcus Hill 

Deputy Assistant Director, Assets Management ............................................................... Gregory G. Carver 

 Deputy Assistant Director, Operations Support .............................................................. Bryan Lemons

 

 Assistant Director - Chief Information Officer ....................................................................... Sandra H. Peavy 

 Deputy Assistant Director, Chief Information Officer ..................................................... Raymond Barnett
 2006 Performance Accountability Report 99

fletc

iFor additional information contact:

public affairs office | federal law enforcement training center | 

Glynco, GA 31524 | 912.267.2447 | www.fletc.gov

Office of Charleston Operations 

| This office administers the 

delivery of law enforcement 

training programs in 

Charleston, South Carolina.
Federal Law Enforcement Training Center

U. S. Department of Homeland Security

1131 Chapel Crossing Road

Glynco, Georgia 31524

www.fletc.gov

We train those who protect our homeland